The iPhone SE has been one of Apple’s most underrated gems. It offered solid performance, tapped different markets, and contributed to the company’s revenue. Here’s why the SE was the most underrated cash cow for Apple, and why its discontinuation could leave a significant gap in the iPhone lineup.
1. Affordable Access to the Apple Ecosystem
One of the biggest selling points of the iPhone SE was its low MSRP. Starting at just $429, the iPhone SE became a go-to option for budget-conscious buyers who wanted to take a slice of the Apple ecosystem pie without breaking the bank. It was also an ideal choice for first-time Apple users, providing all the essentials one would expect from a budget smartphone.
However, the new iPhone 16e, which replaced the SE, struggles to find its perfect market fit due to a higher $599 price tag. This doesn’t quite resonate with budget shoppers, especially when Android competitors look more appealing. For instance, the Google Pixel 6A offers similar features at a lower cost.
By discontinuing the iPhone SE, Apple risks losing its customers who prefer affordable phones. This will leave a gap in their lineup that’s hard to fill.
2. Captured Compact Smartphone Market
With the 4.7-inch iPhone SE, Apple successfully captured the compact smartphone market, enticing users who preferred smaller, more manageable devices. Apple’s mid-ranger delivered a perfect balance of size and power. As a result, it became a favorite for many, especially children and elderly users.
Apple attempted to expand this reach with the iPhone 12 and iPhone 13 Mini models. However, they failed to replicate the SE’s success in the compact category. Now, by killing the iPhone SE, Apple has no compact iPhone to offer. Even the smallest iPhone starts with a big 6.1-inch screen size. Due to this, the Cupertino tech giant would lose its niche market.
3. Higher Margins in the Budget Smartphone Category
The iPhone SE helped Apple enjoy strong profit margins in the low-priced smartphone category. It didn’t offer advanced features like an upgraded screen, the most powerful processor, or the best camera. Apple used available components like the iPhone 8 chassis or already existing chipset.
This way, the company didn’t have to spend much on developing new components, allowing it to control the overall cost. By cutting down on premium features and offering only the essentials, the manufacturing cost of the SE was relatively low compared to the flagship models. This helped Apple to generate a nice profit even with a lower retail price.
4. Boosted Apple Loyalty and Retention
The iPhone SE impressed value-seeking shoppers and fans of smaller smartphones. It also attracted users upgrading from older, non-flagship devices. Plus, it was a reliable option for Apple enthusiasts looking for a secondary or backup phone. This way, the iPhone SE played a key role in allowing Apple to expand its customer base.
With a solid offering, budget-conscious users had no reason to ditch the Apple ecosystem. With the discontinuation of the iPhone SE, Apple might lose these customers to Android, as there are no affordable alternatives in its catalog.
5. The Perfect Blend of Power and Value
Despite a budget-friendly price tag, the iPhone SE models had a powerful engine. For instance, the iPhone SE 3 was equipped with an A15 Bionic chip that was comparable to the iPhone 13 lineup. It helped Apple to attract users seeking a solid performance without the need to splurge on high-end models.
In short, the iPhone SE was a simple yet powerful device with long-term software support. And with a $429 price tag, it was one of the best value-for-money smartphones. It appealed to everyone who didn’t need all the extras of newer models but wanted the experience and longevity of Apple devices.
Why did Apple Discontinue the iPhone SE?
Smaller Market
There’s no denying that the market for smaller smartphones has dwindled significantly in the past few years. As demand for compact devices dropped, many manufacturers have started focusing on larger models, catering to the growing preference for bigger screens.
Apple’s Future Strategy
Apple’s decision to discontinue the iPhone SE and replace it with the iPhone 16e reflects its strategy to focus on flagship devices and maximize profits. The new iPhone 16e also supports Apple Intelligence, reinforcing the tech giant’s commitment to AI-powered features. This aligns with Apple’s broader vision, which focuses on premium devices and advanced features to stay on top.
Impacts of Discontinuing iPhone SE
The discontinuation of the iPhone SE has left a gap in Apple’s lineup for budget-conscious buyers. Also, it ended the classic “smaller iPhones” era. Now, Apple has no option to cater to people who prefer a smaller phone with no frilly bits. With no comparable option in Apple’s lineup, many users may switch to Android. This could impact iPhone sales, especially in price-sensitive markets.