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Is the iPhone SE a cheap cannibal of Apple’s higher-end phones?

Glenn Fleishman | April 18, 2016
Examining previous phone upgrades, it’s clear the iPhone SE fits Apple’s previous pricing patterns.

It gives Apple the tick and tock for introducing larger flagship models, and a stalwart “half-tock” for its customers who want a 4-inch phone. In 2013, Apple could offer Touch ID just on an iPhone 5s, Retina on all models for sale, and both 3.5-inch and 4-inch form factors, but also a range from a fairly underpowered iPhone 4’s A4 processor to the still presentable 5s’s A7.

In 2016, every device has Retina, Touch ID, and Apple Pay; only two processor models are in use (the A8 and A9); and the phones have either 1GB or 2GB of RAM. Even though many older iPhones (and a vast number of older iPads) remain in use, this level of consistency gives Apple the ability to make blanket statements—like, all our iPhones have Apple Pay—and developers a higher-level target to consider for new projects or app tune-ups.

This doesn’t feel like Apple is eating the bottom of its own product line, which would be a classic Innovator’s Dilemma approach. Even with the market in the developing world that many analysts believe the iPhone SE has in its sights, the SE doesn’t undercut the difference in utility of phones with a bigger screen—nor the status element of having what’s recognized as a new phone and a flagship model. Apple will certainly roll in more differentiators this fall, and may keep the SE locked with its current set for years, albeit with minor upgrades to keep it up to date with the group of larger phones.

It seems fairer to say that Apple has done the tablecloth trick, where one whips a fully set table’s cloth off and leaves dishes and silverware in place. By keeping the form the same, Apple continues its path up a steeply angled conveyor belt, which dispenses new, fancier products at the top, and lets the oldest ones drop off and disappear.


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