Daily Management Review

Analysts: New iPhone SE Is a Failure


03/23/2016


Earlier this week, Apple introduced the new iPhone SE with 4-inch screen. The market gave to the novelty cold shoulder, to say the least. Some experts are prophesying to the compact smartphone fiasco.



Kelvinsong
Kelvinsong
KGI Securities analysts downgraded forecasts for iPhone SE and predicted deliveries of this model around only 10-12 million units in 2016. The total volume of shipments of the new Apple’s smartphone is expected in the range of 210-230 million units.

Bloomberg notes that majority of Wall Street experts, including UBS Group AG and RBC Capital Market analysts, are making slightly more optimistic forecasts, and believe that Apple will manage to sell 15 million iPhone SE. Yet, this figure is still negligible.

Counterpoint Technology Market Research experts closely examined the novelty and tried to determine what Apple was aims at, releasing the device. Experts made several conclusions. Firstly, the release of iPhone SE helped to increase the average price of Apple smartphones sales. The cheapest modification of the cheapest iPhone costed around $ 300 last year. Meanwhile, iPhone SE will cost $ 400-500, depending on the amount of memory. This smartphone occurred to be even less budget than its predecessor in the face of iPhone 5C.

Well, Apple is not positioning it that way either. According to the company, it was created for lovers of traditional design and compact smartphones.

Analysts at Counterpoint Technology Market Research also believe that now Apple will be able to get rid of obsolete versions of iPhone, which only take up production capacity. Finally, the novelty is designed to possessing exceptional technical features, to transfer more users on a modern version of iOS and bring the new services to them.

In conclusion, the expert said that the model with the prefix SE is rather a niche product that is not widespread. Demand for 4-inch apparatus is gradually decreasing worldwide. According to Counterpoint, less than 10% of users have opted for such models in 2015, compared to 17% in 2014. Moreover, 75% of those who have purchased a 4-inch device, prefer cheap cell phones priced around $ 75.

Practically, the current owners of the 4-inch Apple smartphones of yesteryear can become the only target audience for iPhone SE. However, suggestion, that most of these users would buy iPhone SE to replace the old device, would be at least strange. The popularity of smartphones with large screens is still growing steadily, and most Apple's product range includes a big-screen handset for about the same money.
 
Analysts also warn that the model is too expensive for the emerging markets, on which, in theory, iPhone SE is oriented. In India, for example, about 70% of purchased smartphones cost less than $ 150.

As for China, there are risks that iPhone SE will find the same fate as the iPhone 5C, which was released three years ago, says Shaun Rein of China Market Research Group. One of the main problems of iPhone SE’s predecessor was the lack of status. The society widely believe that only those who do not have enough money for a "real" iPhone buy iPhone 5C.

With iPhone SE, things are a little different, because it is not cheaper than its senior fellow and almost not inferior to them in the specifications. However, the model is too strongly reminiscent of iPhone’s previous generation, and this can adversely affect its reputation.

source: fortune.com






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