With the iPhone SE (2020), Apple has taken over the market for mid-range smartphones from the Android competition. Is the company now going a step further?
Apple could already present a new iPhone SE for 2022 in early March. According to a well-known industry analyst, this is an opportunity for the company to sell the current 2020 iPhone SE at a significantly lower price.
Will Apple make the iPhone SE even cheaper in 2022?
Bloomberg’s Mark Gurman writes in his newsletter that with the launch of the new iPhone SE, Apple could drop the price of the old SE to $199. That would make it half the previous price of $399 on Apple’s side. Gurman argues that this would give Apple a chance to establish itself in regions like Africa, South America and parts of Asia. Apple’s market share there has so far been small, instead cheap Android smartphones are widespread. However, the company could outperform the competition with a sub-$200 iPhone. That would be a lucrative long-term model for Apple, which is trying to continue expanding its subscription services like iCloud, Arcade, Apple TV+, and Apple Music. For many, the iPhone is also the entry point into Apple’s ecosystem and an incentive to buy more products such as AirPods or Apple Watch.
Gurman cites India as an example, where Apple has a smartphone market share of less than four percent. Here, people spend an average of USD 196 on a smartphone. An iPhone SE for USD 199 would therefore have a good chance of becoming a sales success. But there is also a market for a budget iPhone in Europe and North America.
Gurman has loud Apple track an 85.5 percent accuracy rate for his predictions. He correctly predicted the launch of the AirPods 3 and new MacBooks with M1 Pro and M1 Max in 2021, as well as numerous iPhone 13 functions.
Read more about the iPhone SE 2022: All information about iPhone SE Plus and iPhone SE 3
Can Apple sell a cheap iPhone for a profit?
The legitimate question is whether it’s worth Apple selling an iPhone below $200. According to Gurman, the material cost of the iPhone SE was around $200 two years ago. The company uses many parts from the iPhone 8 to keep costs down. In the meantime, the production for Apple should be even cheaper. Still, don’t expect the 30 to 40 percent profit margin that’s common for Apple products. So the company would have to hope for the sale of accessories and subscriptions.
source
Bloomberg Newsletter “power on‘ by Mark Gurman