“Under Steve Jobs’ guidance, Apple has had the charter to create the best products they can in every area they compete, and the Macs and iPhones are no exception,” Tim Bajarin writes for Forbes as he explains what might be Apple’s rationale for a budget iPhone. “Jobs made design, innovation and usability the heart of Apple’s business model, and the fact that they ended up perceived as premium products were by design.”
Apple’s iPhone 5cOne ironic twist of this strategy is that by holding this course since 2007, when the iPhone debuted, Apple continues to make the lions share of profits in the smartphone business. While unit shipments of iPhone pale in comparison to cheaper, low and mid-range smartphones, Apple continues to be the most profitable maker of smartphones by a wide margin…
I have no direct information as to whether a lower-cost iPhone SE or iPhone 9 is around the corner, but if it is, there will be some strong reasons for Apple to introduce a lower-priced iPhone at this time… I believe the iPhone SE introduced in 2016 was more of a pricing experiment than a long term strategy… The fact that they killed the SE in 2018 says a lot about a lower-cost iPhone’s viability…
If Apple decided to enter the sub-$500 iPhone market this time, this would not be another pricing experiment… lower-cost iPhone could make sense early in this decade as a means of getting more people into Apple’s ecosystem of products and services. All the while, building up more services and laying the foundation for an eventual AR push.
MacDailyNews Take: Of course, it’s a balancing act since buyers of low-priced iPhones are naturally less inclined or even unable in developing markets to spend extra on services. As we wrote last week, “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!”
