If you could perform the same as one iPhone 14 for about half the price, don’t you think it would be worth getting? According to analyst Ming-Chi Kuo, Apple may scrap the next version of its wallet-friendly iPhone SE, which was expected to arrive next year.
“The supply chain has received instructions from Apple indicating that production and shipment plans for the 2024 iPhone SE 4 have been canceled rather than delayed,” Kuo wrote in a Medium post on January 6.
If Kuo’s predictions are correct, only Apple knows the reasoning behind the cancellation. But research and media reports suggest there may be a very simple answer. More expensive iPhone models tend to be more popular, possibly leaving little incentive for Apple to continue to pursue cheaper phones like the iPhone SE.
Apple did not respond to CNET’s request for comment.
The third-gen iPhone SE, which debuted in March, starts at $429 and is basically an iPhone 8 stuffed with the guts of an iPhone 13. CNET’s Patrick Holland called it a “mind-blowing value”. review his iPhone SE (2022).but he also highlighted missing elements that make it feel dated, such as its lack of a full screen or night mode for the camera.
Previous generations of the iPhone SE took a similar approach; the 2020 version had essentially the same design but had the iPhone 11’s chip. The 2016 model had the body of an iPhone 5S with the processor of an iPhone 6S. A rumored fourth-gen iPhone SE was expected to adopt a new design similar to the iPhone XR, according to YouTube personality and gadget leaker Jon Prosser.
To understand why Apple canceled its next iPhone SE, consider the changes Apple recently made to its iPhone 14 lineup. In a departure from the previous two years, Apple did not release a cheaper “mini” version of its new flagship iPhone in 2022. Instead, it released a larger version of the regular iPhone 14 called the iPhone 14 Plus, which is $100 more expensive than the regular $799 iPhone 14, raising the barrier to entry for shoppers.
This change follows reports from the Nikkei Asian Review and Kuo (via MacRumors ) that Apple will scrap the iPhone Mini in 2022, with the former adding that the Mini model is not resonating with consumers. In summary, the elimination of the Mini and reports that next year’s rumored iPhone SE may be discontinued could indicate that Apple is turning away from releasing smaller, cheaper iPhones.
But Gene Munster, managing partner of tech investment firm Loup and a longtime Apple analyst, doesn’t see it that way. He believes that the iPhone SE still plays an important role in Apple’s lineup due to its low price.
“It’s still, I think, the best value for your money when it comes to an iPhone,” he said.
Evidence suggests that more expensive iPhones tend to be top sellers, which could help explain the shift. The average selling price of an iPhone increased 7% year over year in the third quarter of 2022, according to Counterpoint Research. The market research company also reported in June that Apple dominated the global market for premium phones with a 62% share in the first quarter of 2022. It is important to note that Counterpoint defines premium phones as devices that cost $400 and above, meaning the third-gen iPhone SE would fall into this category because it starts at $429. However, the report said that Apple’s growth in the premium category will largely come from the iPhone 13 lineup.
The more expensive iPhone 14 Pro and Pro Max also seem to be the stars of Apple’s new smartphone lineup so far. The information reported that Apple cut the production of the iPhone 14 Plus within two weeks of its launch, while the research company Trendforce says that Apple increased the production of the iPhone 14 Pro and Pro Max. Kuo too said on Twitter in September that the iPhone 14 Pro Max was responsible for about 60% of Apple’s order increase for the Pro lineup, which indicated that Apple’s most expensive new iPhone is also its most popular. A November 2022 report by Wave7 Research also said that 38 out of 39 carrier service representatives surveyed said they had no inventory of the iPhone 14 Pro or Pro Max in store.
The iPhone SE, meanwhile, has accounted for only about 5% to 8% of quarterly U.S. iPhone sales over the past two years, said Josh Lowitz of Consumer Intelligence Research Partners. When you look at the total volume for the newest iPhone models in a given year, the Pro versions typically account for 35% to 40% of sales, while the iPhone SE accounts for about 20%, according to Munster.
Carrier discounts have also made it easier to snag high-end phones at cheaper prices, especially if you’re trading in an old device like my colleague Eli Blumenthal pointed out after the launch of the iPhone 13. Many US shoppers also pay for their phones in monthly installment plans through carriers, which can more easily swallow higher prices. Both of these factors can make the case for buying a less expensive iPhone with fewer features all the more challenging.
“Because you’re paying over such a long period of time … the $100 price difference, or even a $200 price difference, isn’t that much per month,” Lowitz said.
At the same time, Samsung saw success in the market for cheaper phones. Its Galaxy A phones, which typically cost hundreds of dollars less than its flagship Galaxy S phones, accounted for 58% of Samsung’s smartphone unit sales in 2021, according to Counterpoint Research data previously provided to CNET. Samsung’s Galaxy A phones have modern features not found on the iPhone SE, such as a camera with multiple lenses and larger screens, although they often run on less powerful processors than Samsung’s more expensive phones.
The notion that Apple may have canceled the 2024 iPhone SE raises questions about the future of the SE line in general. Apple has extended the SE branding to the Apple Watch in 2020 for the first time and launched a sequel to that product in September.
iPhone SE (2022): Apple’s cheaper phone brings 5G to a classic design
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The fact that Apple brought the SE line into another product made it seem like a more permanent fixture in Apple’s lineup. But if Kuo’s insight is correct, the iPhone SE’s days may be numbered. And if you take a closer look at how Apple’s smartphone lineup has changed and the data surrounding phone shipments, it’s easy to understand why.
But Munster isn’t convinced that cheaper iPhones like the SE are going away forever. Having a more affordable option makes it easier for Apple to achieve its broader goal of bringing more customers into its web of products and services.
“I think that plays an important role,” he said. “I don’t think Apple will give up that price point.”