Apple’s strategy for a new budget iPhone SE 2 has to be perfect

For months now, rumors have predicted that Apple will announce a new budget iPhone, expect to start at less than $500, which may or may not be called either “iPhone SE 2” or “iPhone 9.”

Apple's iPhone 5c
Apple’s iPhone 5c
Mark Sullivan for Fast Company:

One source believes the new phone will likely sell at $399, roughly the same price as the first iPhone SE. Analysts say Apple needs a lower-cost device to have a better chance of competing in the Indian market, which is huge but also accustomed to paying less than $200 for Android phones. The new phone, one source told me, might also bolster Apple’s phone offering in China… But Apple’s motivation for an upgraded low-cost phone might be more global.

A radically lower-priced iPhone, with the right components and features, could be tempting for a whole group of people that previously couldn’t afford an iPhone. This may include younger people with less disposable income who may use cheaper Android phones and people who bought older iPhones on the used market… The main idea of the SE 2/iPhone 9 is not to bowl consumers over with premium features, but to pull them inside the big tent of the Apple ecosystem.

It could pump up iPhone unit sales and pour gas on the services business by increasing the pool of possible customers.

MacDailyNews Take: Obviously, neither the iPhone 5C or the iPhone SE were successful enough for Apple to continue iterating. The idea of a budget iPhone SE 2 is quite a tightrope to walk. It has to have a perfect mix of specs at a magic price point. It has to grow the user base, not cannibalize from higher-priced, more-capable iPhones. Hopefully, after iPhone 5C and SE, the third time’s the charm!

20 Comments

  1. A true powerful iPhone in a “small” form factor is needed for many that do not want to buy “huge” iPhones. iPhone 5C was underpowered and felt cheap. iPhone SE2 should not be a budget phone . For that purpose Apple sells several outdated models. I am still using the original SE and still waiting for the same overall size. It could have a bigger screen it they want it to be “all screen”. In any case a compact, updated, powerful iPhone SE at 599 dollars.

  2. did MacDaily News actually read the original article, which says the rumored phone will have a 4.9″ display?
    why wouldn’t MDN comment on that mistake, if it had actually read the article.

    i have found that the so-called MDN take on a lot of original articles is so bizarre that i just don’t read the MDN comments and just click on the original article only, skipping the meaningless comments that MDN is adding.

  3. GoeB would disagree with me, but cost is very important. Apple will update the processor in its iPhone 6/7/8 form factor to reduce design, development, tooling, and component costs relative to a new, smaller iPhone SE form factor.

    Cost matters when you are attempting to produce a lower cost world phone (large market segment). I strongly suspect that size is important to a much smaller segment of the iPhone market than cost. Apple apparently believes the same thing or it would have already brought back an updated SE. Most people prefer a larger display.

    I am sorry for those who really want a smaller iPhone. I liked my iPhone 4, too. But I prefer the larger 4.7” display on my iPhone 7. If I could swap it with the same look and feel, but with some updated guts like a recent processor and better camera, then I would be happy to do so.

    1. “Apple will update the processor in its iPhone 6/7/8 form factor to reduce design, development, tooling, and component costs relative to a new, smaller iPhone SE form factor.”

      I agree with you in part, but where we disagree is SIZE MATTERS. I am typing this response on the SE I purchased March 31, 2016 launch day.

      “I am sorry for those who really want a smaller iPhone.”

      Well, on one hand I agree with you, but on the other hand sounds hollow.

      “with some updated guts like a recent processor and better camera, then I would be happy to do so.”

      So would I at original SE SIZE…

      1. Take a look at the recent articles, GoeB. Apple is seeking to produce a lower cost world phone. Cost does matter. Yes, you were wrong when you attacked me (again). But I am used to it after years of largely partisan diatribes.

        When I said that I was sorry, I meant that I was sorry for people that want a smaller iPhone. That wasn’t hollow. I know what it is like to desire a particular type of Apple product, a mix of form, function, and price which never becomes a reality. So you choose the next best option and move on.

        Apple is not Samsung or Huawei. Apple does not release dozens of models in an attempt to cover every niche of the market. As a result, you are unlikely to see a tiny iPhone anytime soon, regardless of how much you want one.

        It would be nice if we were on better terms, GoeB. But it is clear that you and I stand in stark opposition on too many topics that matter a great deal, and you appear unwilling to compromise or to ever admit that you might be wrong over something as minor as a rumored iPhone design.

  4. “…were not successful enough for Apple to continue iterating.”

    What BS analysis. Apple has made many, many mistakes in not iterating successful hardware: 2012 Mac Pro; Cinema Display; AirPort Extreme; Xserve; Color Laserwriter/Stylewriter; Time Capsule; Newton…

    Why didn’t the 5c or SE get “iterated?” Two words: Tim Cook.

    He miscalculated market response for them in concert with other models. The 5c and the SE were in the top tier of all selling phones at the times of their release and for the natural life of their product cycle. If they would have been updated, that would have continued their dominance. Cook opted to push larger, more feature-packed and higher profit margin phones over the 5c and SE.

    Pure market blunder by Cook, as he has done with so many other products.

    1. Yeah, Apple’s nearly gone under since elevating Cook, a shadow of its former self.

      under a better CEO the company would have actually continued to grow and might even have become profitable.

      Give. It. A. Break. With the Timaphobia already… …good grief. His product decisions might not have been the ones you would have made, and probably nearly all of us would agree he allowed the Mac line to languish for far too long.

      Plus, I have a few other pet peeves not so dissimilar to yours, but in terms of the overall success in growing the size, revenue, profitability, technology base, lines of business, market value, prestige, customer satisfaction, and more over a sustained period of years, the Cook story is almost unprecedented in its degree of success for a successor to a wildly charismatic visionary founder.

      1. “Cook story is almost unprecedented in its degree of success for a successor to a wildly charismatic visionary founder.”

        A trained monkey could ride the iPhone gravy train first class while developing NOTHING NEW. FACT: Cook has killed more Apple hardware and software then he has introduced. Unprecedented, indeed…

          1. OK, let’s dance.

            You post your list of what was introduced under Cook, projects like Apple Watch don’t count that began under Steve, and I will list all the hardware and software Cook discontinued.

            If I were you, don’t bother wasting your time or mine…

      2. Sorry, but I’m going to have to agree with this “anti-Cook” narrative.

        It used to be that Apple would support a holistic ecosystem of products such as the printers and routers … no more. As such, Apple is losing its … panache? .. in terms of being a “It Just Works” paradigm where customers could confidently buy Apple-labelled products and they didn’t fight each other.

        Tim’s legacy has been one of a ruthless deconstruction of product breadth and diversity – – from a corporate standpoint, fewer products means higher risk from any one product failing. Witness the MBP keyboard fiasco — showcased now in Prime Tim at the Oscars in an acceptance speech no less! While its certainly true from a manufacturing efficiency standpoint that making fewer products is cheaper, it doesn’t allay market success/failure risks from any one product being a flop.

        Similarly, the risk with a ‘premier’ and exclusive high end product line is that it works until it suddenly does not. Again, this is business risk to manage, and risk reductions come from product diversification. Choosing to dance the high wire act will eventually incur a great fall.

    2. “What BS analysis. Apple has made many, many mistakes in not iterating successful hardware: 2012 Mac Pro; Cinema Display; AirPort Extreme; Xserve; Color Laserwriter/Stylewriter; Time Capsule; Newton…”

      Here is my analysis:

      The 2012 Mac Pro was great, the 2013 Trashcan was not. The 2020 Mac Pro is AWESOME.

      Nothing wrong with Cinema Display, comfortably worked on one for many successful years professionally.

      AirPort Extreme was awesome, are you serious?

      Xserve should be in place and developed today. Unfortunately, Apple lost the will and killed it like so many other Apple offerings over the years.

      Apple printers were treated the same as Xserve and dropped like a bad habit. Personally, I would love to see an Apple printer, like the iPhone model, DESTROY the printer industry.

      What is wrong with Time Capsule?

      Newton was a great idea ahead of its time. Unfortunately it was limited and not fully developed at an outrageous price.

      Just my two cents.

      Manufacturing costs of smaller phones should be less. What’s the problem?…

  5. Right, it’s not considering the cost of Android smartphones at Walmart. My brother bought one for $20 on sale and it has a remarkable amount of features. The one that stood out for me was the voice assistant that bested Siri roughly 70% of the time we dueled the same questions to both devices.

    The new SE if priced at $200 would take India, China and undeveloped countries by storm…

  6. “… neither the iPhone 5C and the iPhone SE were not successful enough … ” English is not my first language but I still know that that sentence is far from correct.
    “… neither the iPhone 5C nor the iPhone SE were successful enough … ” is surely what you meant to write.

  7. There is a very large base of customers that have not refreshed our phone because of the lack of a 4″ size option. I had the iPhone 6 and disliked the size. I went and purchased a SE, AFTER I paid a lot of money for a 6. I disliked the size so much, that I was willing to loose the money I invested in the 6, to have a phone that was sized for my preference. Over the years, I was amazed on how many people complained about the larger sized phones. It’s as-if Tim Cook fell for the Samsung marketing strategy to claim iPhones were inferior due to the smaller size, and Tim felt the need to posture size; while completely ignoring that millions of users were extremely happy with the phone at the size it was.. 4″. Hopefully, someone with a brain, and a set of balls, informs Tim not to repeat MORE mistakes.. something he has had many of….

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