When Steve Jobs headed up Apple Inc., the company was renowned for creating products that would impress and even “delight” its customers. The uninspired iPhone SE unveiled today shows just how far Apple has strayed from that standard.
This is unfortunate, as the world’s richest technology giant certainly has the means to do better.
Apple Iphone The SE, introduced in its current form in 2020, was designed to appeal to budget-minded consumers, who might otherwise gravitate to competitors like the Google Pixel. At $399, the SE costs about half the price of the more popular flagship model. But for that price, consumers got a smaller screen and a weaker camera.
On Tuesday, Apple revealed its latest update for the phone, one of several new and upgraded tools in a product program. The new SE features a faster processor and high-speed 5G wireless capability instead of the 4G used on the previous model, among other incremental improvements. but that’s about it. The design of the phone is similar to that of its predecessor, and Apple raised the price to $429.
A better experience is welcome with new chips and better wireless network access. But most SE users will hardly notice this change. Almost all commonly used mobile apps, including TikTok, Instagram, and YouTube, work almost as well on 4G networks, and yet there isn’t a killer app that requires fast speeds.
Overall, the SE will be a letdown for Apple customers who have been waiting a while for an updated affordable iPhone. The design looks stale based on the 5 year old configuration. It’s clear that Apple isn’t prioritizing customers at the lower end of the market, which is disappointing for a company with an annual R&D budget of $22 billion.
Apple could have been more aggressive with the SE, either by speeding up the design, improving the screen or camera, or cutting the price. According to StatCounter, iPhones account for just 28% of the global smartphone market, compared to 71 percent for Android-based phones. A better SE phone could have made significant inroads with the competition.
Why did Apple choose to do so little with the new SE? The company hopes that its sticky ecosystem of software and services, which includes iMessage, enhanced security and reliable customer service, will keep users in the Apple fold.
Apple may also be concerned that the dramatically improved iPhone SE will reduce demand for the more expensive iPhone 13 and iPhone 13 Pro Max. Those two models cost $800 and $1,100, respectively, for the base phone. Wall Street analysts estimate that SE will only be responsible for 30 million of the annual 245 million iPhones shipped this year.
But Apple probably wasn’t in danger of cannibalizing its high-end phones. Most iPhone users will keep buying the premium model, regardless of what Apple does with the SE. Meanwhile, Apple customers seeking an affordable, full-featured phone either face a lack of innovation or have to move their money elsewhere. There could be more: Midprice competitors such as Alphabet Inc.’s $599 Google Pixel 6, which has a vastly better camera system and vibrant OLED display, stand to benefit from Apple’s complacency around the SE.
Apple has decided that when it comes to the affordable segment of the market, a minor upgrade will suffice. It’s quite a comedian once for a company known for making every detail count.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Tae Kim is a Bloomberg Opinion columnist covering technology. He previously covered technology for Barron’s, following an earlier career as an equity analyst.
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