Apple's First New Low-Cost iPhone Since the iPhone SE Expected to Launch Early Next Year

[Elitegate]

Only it's not outdated because Apple just re-released a new 7th gen iPod Touch this year with the exact same screen. So developers are still going to be expected to support it for the next few years, at least.

I understand how you could think that 4.7" isn't much bigger than 4", but remember it's measured on the diagonal — and all the 6/6s/7/8 phones have a thick bezel around that larger display, making it much too big for comfortable one-handed use...you have to do the dreadfully one-hand-shimmy up and down the phone to reach the full screen. I "upgraded" from a 6 to an SE solely because I didn't like the size of the 6. Perhaps a 4.7" screen would be manageable for one-handed use *if* it had no bezels, but Apple has yet to release a form factor like that.

Yes, but they won't. I don't see it coming, sorry. It's very likely that Apple won't do another compact 4" phone (SE-like design) or an all-screen no-bezel variant of the SE with 4.7" because there is almost no market for it. They need to develop such a phone and have the tooling done and prototypes and research and development and on and on...

Most of the customers are fine with the current set of 4.7" - 6.5" phones. I know, many others are desperate for another compact SE-like phone, but there is simply not market for it. The SE released 3,5 years ago. And no real successor until this day. Why is that? Because the demand for such small phones decreased rapidly over the years. Otherwise Apple would have already given you that SE successor.

Apple would need to sell millions of units. iPhone 6s and 6s Plus were more popular than the 5s/SE in 2015/2016.

The iPhone 5/5s/SE time is over. I'll highly doubt phones like that come back. Look at the Android phones. Every serious Android phone i know has atleast 5" of display, with or without the bezel. No matter the price range, from 200$ to 1000 $.

And honestly, an iPhone 6/6s/7/8 isn't too bad. You can get used to that. I had my 6s for 3 years and i could hold and use that phone with one hand just fine. Yes it's a bit larger, but it works.

And for the iPod touch, Apple had to update that. The 7th gen is literally the same device as the 6th gen which released over 4 years ago, and the only difference between the 6th and 7th gen is the A10 chip, 2 GB of RAM and a 256 GB option. Same display, same camera, same colors. Why did they update the iPod touch? Because of iOS 13. They had to.

The previous 6th gen iPod is not able to run iOS 13 (same as the iPhone 6), because they only feature 1 GB of RAM. Apple doesn't care about the iPod touch anymore, neither do they focus on it. But because some people still buy it i guess (it's a great secondary device / music player for the gym or for your car or for the kids) they wanted to keep it in the line-up (it's under Accessories btw on Apple's webpage).

Maybe they expect developers to make Apps and Games for the iPod or for the SE (SE is supported by iOS 13 after all), but many noticed that some apps (even stock apps) feel kinda cramped. iOS 13 is not made for such a small screen. iOS 13 will support devices with 4", 4.7", 5.5", 6.1" and 6.5" of display. And they need to scale all the apps for that.

 

[bobnugget]

Most of the customers are fine with the current set of 4.7" - 6.5" phones. I know, many others are desperate for another compact SE-like phone, but there is simply not market for it.

As you can see from this thread, there is a small market for it. I'll likely stick with my SE until security updates stop, and then see whats on the market. If there's a small android phone available and nothing from Apple, I'll get that, and they've lost a sale.

I still doubt that Apple will come up with anything. They only focus on large consumer markets these days, to drive customers to their service offerings.

 

[Elitegate]

As you can see from this thread, there is a small market for it. I'll likely stick with my SE until security updates stop, and then see whats on the market. If there's a small android phone available and nothing from Apple, I'll get that, and they've lost a sale.

I still doubt that Apple will come up with anything. They only focus on large consumer markets these days, to drive customers to their service offerings.

Yes i know that. But this small market isn't large enough for Apple to produce them. Look, maybe 10% of all iPhone buyers like the 4" form factor. But that's not enough. Almost everyone needs to want that design back in order for Apple to go ahead and make them.

Apple sells so many phones every year, they don't care if they have you as a customer or not.

 

[bobnugget]

Yes i know that. But this small market isn't large enough for Apple to produce them. Look, maybe 10% of all iPhone buyers like the 4" form factor. But that's not enough. Almost everyone needs to want that design back in order for Apple to go ahead and make them.

Apple sells so many phones every year, they don't care if they have you as a customer or not.

We 100% agree on all of that then

 

[Q-Dog]

Yes i know that. But this small market isn't large enough for Apple to produce them. Look, maybe 10% of all iPhone buyers like the 4" form factor. But that's not enough. Almost everyone needs to want that design back in order for Apple to go ahead and make them.

Apple sells so many phones every year, they don't care if they have you as a customer or not.

Apple sold over 219 million iphones in 2018. If your guess that 10% of those customers want a 4" phone is accurate, that would be 21 million devices. Small market, indeed!

 

[Elitegate]

Apple sold over 219 million iphones in 2018. If your guess that 10% of those customers want a 4" phone is accurate, that would be 21 million devices. Small market, indeed!

21 million is nothing. You know what they should do? An all-screen bezel-less version of the SE. SE body but all-screen and with Face ID. Screen would be roughly 4.7" to 4.8". That requires research, development and tooling.

And that 10% was just an estimate from my side. No idea how many iPhone buyers actually refuse to get anything larger than the iPhone SE. Because, the iPhone 6/6s/7/8 is too big and uncomfortable to use. These phones are also very compact if you ask me.

iPhone 6 and 6 Plus sold 220 million combined. Remember the 5c? That one was a flop and Apple only sold 20 - 30 million of those. Google it.

https://en.wikipedia.org/wiki/List_of_best-selling_mobile_phones

 

[Q-Dog]

So, if Apple can make $50 of pure profit from each device, how many would they have to sell before it would be worth it?

And keep in mind that in the same period Apple TV finally reached sales in the double digits ... so more than 9 million in sales for the first time ever.

Making money for Apple isn't only about the devices, but also about the services attached to the devices. It seems having another 20 or so million devices in the market would be worth it, even if the pure profit from sales is only around $1 billion dollars?

 

[PickUrPoison]

So, if Apple can make $50 of pure profit from each device, how many would they have to sell before it would be worth it?
<snip>
Making money for Apple isn't only about the devices, but also about the services attached to the devices. It seems having another 20 or so million devices in the market would be worth it, even if the pure profit from sales is only around $1 billion dollars?

As you note, it’s not just about the hardware profit, and $50 is probably a good estimate. But (relatively) low demand along with the fact that users of a 4” device are less likely to consume services than if they had a larger device means 4” iPhones are Apple’s past, not their future. Few in Androidland want small screens either, and they’ve got 3-4 times the customer base.

 

[ksec]

A lot of people have this idea about Apple's Services, namely Apple Music, Apple TV, Apple News, iCloud, making money for Apple. When the fact is all these are not not making Apple much if any profits at all.

 

[PickUrPoison]

A lot of people have this idea about Apple's Services, namely Apple Music, Apple TV, Apple News, iCloud, making money for Apple. When the fact is all these are not not making Apple much if any profits at all.

Who told you that? That’s far, far from the truth.

Apple made $10 billion in net profit last quarter—about $3.5 billion from services and $6.5 billion from products. Gross margin for services is twice that of hardware.

Be happy services are doing so well; they’re actually subsidizing hardware prices.

 

[Testerlein]

So, if Apple can make $50 of pure profit from each device, how many would they have to sell before it would be worth it?

What surprises me most, is that Apple doesn't see the real value of this market.
Almost everyone I read from says that he is more than willing to pay premium price.

I for one would pay the full bucks (~1000 €). For the same old design, only with modern features:
NFC, Qi, FaceID (or TouchID on glass), no AUX, but waterresistant, same buttons, maybe slightly different materials (like the rough glass of the iPhone 11 pro), end-to-end-screen and modern day cameras.
Boy, if need be: make it slightly larger so that the screen is compatible to apps and stuff. But please... return from the path where I need a bag for my phone!

Since I'm out of options and this is just a wish, I've bought the bloody iPhone 11 pro.
I'm not concerned about the price of an "iPhone SE 2". Bloody hell, give it the "Apple Premium Look and Feel", make a hype about it and people will stand in line to buy this brick!

 

[cecil444]

Yes, but they won't. I don't see it coming, sorry. It's very likely that Apple won't do another compact 4" phone (SE-like design) or an all-screen no-bezel variant of the SE with 4.7" because there is almost no market for it. They need to develop such a phone and have the tooling done and prototypes and research and development and on and on...

Most of the customers are fine with the current set of 4.7" - 6.5" phones. I know, many others are desperate for another compact SE-like phone, but there is simply not market for it. The SE released 3,5 years ago. And no real successor until this day. Why is that? Because the demand for such small phones decreased rapidly over the years. Otherwise Apple would have already given you that SE successor.

Apple would need to sell millions of units. iPhone 6s and 6s Plus were more popular than the 5s/SE in 2015/2016.

The iPhone 5/5s/SE time is over. I'll highly doubt phones like that come back. Look at the Android phones. Every serious Android phone i know has atleast 5" of display, with or without the bezel. No matter the price range, from 200$ to 1000 $.

And honestly, an iPhone 6/6s/7/8 isn't too bad. You can get used to that. I had my 6s for 3 years and i could hold and use that phone with one hand just fine. Yes it's a bit larger, but it works.

And for the iPod touch, Apple had to update that. The 7th gen is literally the same device as the 6th gen which released over 4 years ago, and the only difference between the 6th and 7th gen is the A10 chip, 2 GB of RAM and a 256 GB option. Same display, same camera, same colors. Why did they update the iPod touch? Because of iOS 13. They had to.

The previous 6th gen iPod is not able to run iOS 13 (same as the iPhone 6), because they only feature 1 GB of RAM. Apple doesn't care about the iPod touch anymore, neither do they focus on it. But because some people still buy it i guess (it's a great secondary device / music player for the gym or for your car or for the kids) they wanted to keep it in the line-up (it's under Accessories btw on Apple's webpage).

Maybe they expect developers to make Apps and Games for the iPod or for the SE (SE is supported by iOS 13 after all), but many noticed that some apps (even stock apps) feel kinda cramped. iOS 13 is not made for such a small screen. iOS 13 will support devices with 4", 4.7", 5.5", 6.1" and 6.5" of display. And they need to scale all the apps for that.

All these same arguments were made widely and confidently against the Mac mini, until 4 years later, voila, against much speculation, a new and more powerful one appeared in the same form factor, despite its long questioned placement in the product lineup. So, never say never.

I’m not hugely optimistic about a new SE, but I will continue to wait with the many many others, reading the tea leaves and pestering Apple, to lobby for a suitable replacement.

 

[ksec]

Who told you that? That’s far, far from the truth.

Apple made $10 billion in net profit last quarter—about $3.5 billion from services and $6.5 billion from products. Gross margin for services is twice that of hardware.

Which is what precisely most people understood about Services and their margin.

The absolute majority of Profits from Services are basically two things, Google Search Placement, In App Purchase, the two combined have 95%+ Net Margin. There is recently a third thing which is Services from maxOSX, iOS, and Maps at $25 per devices.

And then when you add everything together the gross margin of Services drops to 60%. Those so called Services which majority of people refer to as Apple Music, TV+, News can then be operated at breakeven to dilute their App Store and Ad Placement profits. Which will then effectively act as a Moat around Apple's ecosystem.

As a matter of fact it isn't Apple wanted to operate those services at Breakeven point, it is simply the nature of the business with laser thin margins, Look at Spotify and Netflix's report. Not to mention Apple paid more per song and bid higher per show.

Be happy services are doing so well; they’re actually subsidizing hardware prices.

Apple's gross and net margin has been extremely stable, prior even to Services. There are no signs of Services subsidising hardware.

 

[Expos of 1969]

Who told you that? That’s far, far from the truth.

Apple made $10 billion in net profit last quarter—about $3.5 billion from services and $6.5 billion from products. Gross margin for services is twice that of hardware.

Be happy services are doing so well; they’re actually subsidizing hardware prices.

Who told you that? They should be subsidizing hardware prices but are they? Unless you work at Apple you have no idea if this is the case.

 

[s54]

If anyone has a brand new SE they’d like to sell, let me know please. I’ve been trying to find one online, but there are no new ones left anywhere. It must be unlocked.

I tried eBay, but unfortunately all are refurbs unlawfully sold as “new”.

 

[PickUrPoison]

Who told you that? They should be subsidizing hardware prices but are they? Unless you work at Apple you have no idea if this is the case.

Wrong. Math is math.

Looking at last quarter, overall gross margin was 37.6%, close to a 10-year low. (Ranges from 36.9% to 47.4% since 2009.)

But hardware gm by itself was 30.4%. They only made their ~40% target margin because they had over $11 billion in services revenue—which has a 64.1% gross margin. If they hadn’t had the extremely profitable services pulling up overall gm, hardware prices would have had to be higher.

It’s easy to see what will happen as services revenue grows to be a larger slice of the revenue pie than its current ~20%; Apple will be able to drop hardware prices even further, driving hardware gm first to high twenties, then mid-twenties. All while still being able to maintain their overall target gm—all thanks to the high profits derived from new and existing services.

Typical Apple: smart, well-executed long-term strategic plans. Thanks Tim Apple!

 

[PickUrPoison]

<snip>
Apple's gross and net margin has been extremely stable, prior even to Services. There are no signs of Services subsidising hardware.

How do you think overall gross margin is in the high thirties when hardware gm is in the low thirties? What do you think would have to happen to hardware prices if Apple didn’t have high margin services pulling up overall gm?

 

[cardfan]

Which is what precisely most people understood about Services and their margin.

The absolute majority of Profits from Services are basically two things, Google Search Placement, In App Purchase, the two combined have 95%+ Net Margin. There is recently a third thing which is Services from maxOSX, iOS, and Maps at $25 per devices.

And then when you add everything together the gross margin of Services drops to 60%. Those so called Services which majority of people refer to as Apple Music, TV+, News can then be operated at breakeven to dilute their App Store and Ad Placement profits. Which will then effectively act as a Moat around Apple's ecosystem.

As a matter of fact it isn't Apple wanted to operate those services at Breakeven point, it is simply the nature of the business with laser thin margins, Look at Spotify and Netflix's report. Not to mention Apple paid more per song and bid higher per show.



Apple's gross and net margin has been extremely stable, prior even to Services. There are no signs of Services subsidising hardware.

Spot on. Apple wants to show increased services. That’s the name of the game now. Each iPhone sale will allocate towards atv now in addition to others.

I expect services to jump because of this. AppleCare to monthly is another increase. Heck monthly is all you can choose in settings which is underhanded but people will do this.

Atv+ is a sinkhole. Other revenues will subsidize this for years if Apple sticks with it.

 

[Expos of 1969]

Wrong. Math is math.

Looking at last quarter, overall gross margin was 37.6%, close to a 10-year low. (Ranges from 36.9% to 47.4% since 2009.)

But hardware gm by itself was 30.4%. They only made their ~40% target margin because they had over $11 billion in services revenue—which has a 64.1% gross margin. If they hadn’t had the extremely profitable services pulling up overall gm, hardware prices would have had to be higher.

It’s easy to see what will happen as services revenue grows to be a larger slice of the revenue pie than its current ~20%; Apple will be able to drop hardware prices even further, driving hardware gm first to high twenties, then mid-twenties. All while still being able to maintain their overall target gm—all thanks to the high profits derived from new and existing services.

Typical Apple: smart, well-executed long-term strategic plans. Thanks Tim Apple!

This is all speculation on your part. Incredible that you believe what you post as gospel. You are just guessing. Math is math is based on your inside info from Apple? No I didn’t think so. You post like you are privy to inside info. Get serious.