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The iPhone SE: a surprise hit?

Jason Snell | June 22, 2016
Right now, “overwhelming demand” for the the iPhone SE means that Apple can’t make them fast enough – that used to happen all the time, but it’s been a while since Apple has been behind on iPhone supply.

That's just speculation. What's fact, based on what Apple CEO Tim Cook said on Tuesday, is that Apple blew it when it came to its forecasts for how well the iPhone SE would sell. Right now, "overwhelming demand" for the the iPhone SE means that Apple can't make them fast enough - that used to happen all the time, but it's been a while since Apple has been behind on iPhone supply.

And Cook owned up to it. "It is clear that there is demand there, even much beyond what we thought, and so that is really why we have the constraint that we have," he said. More specifically, Cook suggested that Apple underestimated the number of people who "wanted the latest technologies, but wanted it in a more compact package".

iphone se review mrv 010 34

The power of the price tag

In an era where phone subsidies are being replaced by financing plans, at least in the US, consumers are now seeing - often for the very first time - the actual price of that shiny new smartphone they've been buying every two years or so. That's going to lead to some sticker shock. Having the iPhone line start at $679 is a good place for Apple to be, even in the richest markets.

But more than that, the iPhone SE gives Apple access to some potential customers it may not have been able to reach before. Apple's never going to be the low-price leader in a category, but it's a brand that represents quality, and people do aspire to buy Apple products, most especially the iPhone.

"It's attracting people who aspire to own an iPhone, but couldn't quite stretch to the entry price of the iPhone," Cook said Tuesday. "I do think that we will be really happy with the sort of new-to-iPhone customers that we see from here, because of the early returns we've had."

A key player, not the star

I think it's unlikely that the iPhone SE will ever sell in amounts within hailing distance of the top-of-the-line iPhones. But that's OK. The iPhone is no longer a single product, like it was in the old days, but a product line. If you consider last year's models, which are still lingering, there are five different iPhone models available to potential buyers.

The iPhone SE doesn't need to be a runaway success. It's a part of the larger story, a product that sets a lower entry price and appeals to people who don't like the feel of a larger phone in their hands. But it's clear that, at least right now, it's a bigger part of Apple's overall iPhone picture than even Apple itself expected a month ago.

Source: Macworld AU


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