Jon Laughlin | id: 215328467 | username: jonlaughlin | email@example.com
Ever since Apple changed the face of telecommunication in 2007 with the introduction of the worlds first smartphone, the iPhone, Apple has been relentless in its annual introduction of bigger and better iPhone models. The release of the iPhone 6 and 6 Plus in 2014 saw the 3rd and 4th iteration in Apples increasing phone sizes with new models fitted out with the latest and greatest technology (Time, 2014).
The iPhones little brother
March 2016 brought a divergence from Apple usual path with the introduction of a smaller, cheaper iPhone know as the iPhone SE. The SE has a screen size of 4 inches compared to 4.7 inches for its iPhone 6s cousin and 5.5 inches for the iPhone 6s Plus. Not only did we see a reduction in screen size but also the absence of new immerging technology.
Why this sudden change in direction? The iPhone SE is not intended to replace the 6s or 6s Plus but to augment the array of iPhones available. Apple was well aware that there was a section of the market that their larger models didn’t fit into, therefore to capture this market they needed to develop a product to target the needs and desires of these specific customers.
Small size, Big results
At the launch of the iPhone SE Apple announced it had sold 30 million units of its older 4 inch iPhone 5 model during 2015, which accounts for 13% of total iPhone sales (Statista, 2016). Thirteen percent may seem insignificant however it translates to approximately $19 billion US dollars in revenue (Golson, 2015). Clearly it’s a segment Apple should continue to hold onto.
Why step backwards?
Apple outlined 2 reasons people choose the 4 inch model, firstly people want a smaller phone or secondly it’s their first iPhone. A third overlapping reason Apple failed to mention is likely the most influential factor, a lower price point. Surely Apple is trying to target a market of younger or less financially able individuals who want the iPhone experience but don’t have the expendable income to purchase their top of the line models. This fact is emphasized by the technology choices Apple have decided to include (or exclude) and the way they have promoted these inclusions.
Currently the iPhone SE starts at $679 in Australia, compared to $1079 for the 6s or $1229 for the 6s Plus. At less then 65% of the cost of the higher end version the SE will be much more accessible to many in the smartphone market.
Pretty in pink
Changes from the previous iPhone 5 model include a new rose gold model. The rose gold is relatively new to the iPhone market and will primarily be targeted to the female demographic. Apple’s previous foray into the lower end iPhone market with the iPhone 5c saw a much larger percentage of females purchasing this model compared to their male counterparts (Evans, 2013). Apple clearly expect these trends to continue.
Chips to rival the 6s & 6s Plus, but why?
Apple has included their top of the range A9 chip and the M9 motion coprocessor, similar to the 6s and 6s Plus. These chips are promoted as offering users the best experience for fitness tracking and for gaming. Both features are typically expected to attract a young consumer. These same chips used in the high end models are advertised as offering faster CPU performance reviling desktop systems. Clearly a feature to attract the business focused consumer.
Camera quality is a must have
Cameras have become a huge part of the smart phone industry and have taken a significant chunk of the market away from standalone digital cameras. Smartphone sales topped 1 billion in 2013 during which time digital camera sales dropped 36% (Taylor, 2014). The growth of social media and camera accessibility has contributed to the younger demographic taking more photos then ever before. Apple identified the desire for good quality photos and opted to include their top of the range camera in the SE model. Not only is the camera quality high Apple is quick to point out their unique retina flash feature for taking selfies, we all know how important selfies are!
Feature left out of the SE model include force touch, some sensor technology and the obvious reduction in screen size and contrast. No new technology has been introduced.
Too much, or just enough?
Overall it is clear that Apple is trying to position itself to capture a greater segment of the smartphone market. Introducing less financially able customers to the iOS world will help cement the Apple brand in the mind of those in a position to become long term future customers. Apple is a proven player in the massive smartphone market, diversifying within this market is a no-brainer. Gaining even a small percentage of the market from competitors translates to huge financial gains, as does ensuring the retention their existing customers. Apple will need to take care not to spread itself too thin going forward however my initial prediction is that the current range of iPhones will satisfy the needs of the majority of the market and is a smart move for Apple.
Apple. (2016, March 21). Apple Events. Retrieved April 17, 2016, from Apple: http://www.apple.com/au/apple-events/march-2016/
Evans, B. (2013, December 7). Who buys the iPhone 5C? Retrieved April 17, 2016, from Benidict Evans: http://ben-evans.com/benedictevans/2013/12/8/who-buys-the-iphone-5c
Golson, J. (2015, October 27). Apple’s Record 4Q 2015 Results: $11.1 Billion Profit on $51.5 Billion Revenue. Retrieved April 17, 2016, from MacRumours: http://www.macrumors.com/2015/10/27/q4-2015-earnings/
Statista. (2016, April 17). Global Apple iPhone sales from 3rd quarter 2007 to 1st quarter 2016. Retrieved April 17, 2016, from Statista: http://www.statista.com/statistics/263401/global-apple-iphone-sales-since-3rd-quarter-2007/
Taylor, B. (2014, August 19). PCWorld. Retrieved April 17, 2016, from How the smartphone defeated the point-and-shoot digital camera: http://www.pcworld.com/article/2466500/how-the-smartphone-defeated-the-point-and-shoot-digital-camera.html
Time. (2014, June 27). 8 Years of the iPhone: An Interactive Timeline. Retrieved April 16, 2016, from Time: http://time.com/2934526/apple-iphone-timeline/