Just weeks after the launch of its iPhone 11, Apple Inc. (NASDAQ:AAPL) has announced the 2020 release of a smaller, cheaper model that packs the same power as its high-end counterpart. The company will be launching the iPhone SE2 in the first quarter of next year, and one Apple analyst thinks the device will come equipped with an A13 processor and 3GB of RAM.
This new smartphone will be the successor of the 2016 iPhone SE and is expected to look similar to the iPhone 8. Like the original iPhone SE, Apple created this model to offer consumers a cheaper alternative to the pricey smartphones currently on the market.
According to TF International Securities analyst Ming-Chi Kuo, the new iPhone SE2 will be the best upgrade option for the existing 100 million iPhone 6 series user and will be a key growth driver for the company in 2020.
Kuo believes this new phone will meet more users’ demand and increase iPhone’s market share due to its affordable price, although it’s unclear what it will sell for. Considering the iPhone 8 is retailing at around $449 USD, it’s likely the iPhone SE2 will be around the same.
Recapturing Its Smartphone Market Share
Apple’s newer, more affordable model comes at a time when global smartphone sales are continuing on a downward trajectory, declining by 1.7% in Q2 2019. This drop in sales is attributed to higher price tags for high-end models, longer refresh cycles, and fewer compelling features. The truth is, too many incremental benefits are stopping current smartphone users (namely iPhone) from upgrading to new models.
During the second quarter, Samsung (OTC:SSNLF) and Huawei overtook Apple in the number of units sold. Samsung’s growth has been led mainly by mid-range and entry-level models like its Galaxy A series. Meanwhile, iPhone sales have continued to decline, particularly in Q1 2019. Apple sold just over 38 million iPhones in the second quarter, a 13.8% decline year-over-year.
The introduction of the cheaper model will likely help Apple regain some of its market share back from its competitors and allow its customers to upgrade without breaking the bank.
The global smartphone sales will remain weak for the remainder of the year, with 1.5 billion units expected to be sold worldwide in 2019.
Are Mid-Range Smartphones the Future?
While there will always be tech-savvy individuals who lust after the latest and greatest high-end smartphone, it’s evident that the mid-range models are set to overtake the market share. In terms of design, the mid-range models are not too different from their high-end counterparts. Of course, the quality of the camera might be compromised with the lower models, as many of the top-shelf smartphones now offer multiple lenses.
When it comes to performance, the newest high-end smartphones offer little in terms of innovation compared to the last versions. What’s more, the upcoming breakthrough of the fifth generation of wireless communication (5G) in the coming year will be useless to anyone using a smartphone that can’t access the 5G network.
Ultimately, consumers are not buying into the idea that the latest model is, in fact, the greatest model. When it comes to Apple’s iPhone SE2, consumers who are overdue for an upgrade or want a faster processor without breaking the bank will find this option to be perfect.
It will be interesting to see if Apple can regain its share of the market in the last quarter or early next year with the release of its mid-range model.
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