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The original SE was about moving downmarket: coming up with a way to sell an iPhone at the never before seen price point of $349/399. The only way to do that was using a 2.5 year old model, whatever that be.

If in 2016 Apple could have gotten to that price with a 4.7” model, there never would have been another 4.0” iPhone. People wanted bigger screens, evidenced by the smash hit of 2014’s new 4.7” and 5.5” form factors introduced with iPhone 6.

Similarly, today if Apple could find a way offer the 5.5” Plus at $399, we wouldn’t be getting another 4.7” iPhone now. Because a 5.5” iPhone at $399 would sell better than will a 4.7” iPhone at $399.

Android switchers especially don’t want small screens. They’re used to getting a large screen at $250, let alone $399. A 4.7” screen is a joke to them. In 3-4 years when the newest SE is a 5.5” screen, it’ll finally be big enough for them.

It's curious that there's been little talk of a 5.5" SE Plus / 9 Plus, even rumour that it might come later. But a start price of $499-549 would fill the gap between that and the current Xr and marketing-wise they'd have to launch the phone at the same time as the SE/9 to prevent people from holding off just in case.

I'd suspect that the forthcoming 5.4" iPhone 12 could be that device - in 2 years OLED might be cheap enough for a $400 'budget' iPhone (maybe the Pros would have moved on to mini LED) and the case design and engineering costs would have been largely amortised for that model by then.

In due course the iPhone 11 (a 6.1" phone) would drop to the Xr $699 price point in September and Apple may decide to give the Xr another 12 months on the scene but it might confuse things to have it linger as another 6.1" option opposite an iPhone 11 which is $100 more expensive.

The large screen preference phenomenon is well known across Asia too, and you'd imagine women would be happy with a large screen device in their purses which possibly runs contrary to what Steve Jobs always thought with a 3.5" screen being usable be women one handed. In this age of ever bigger screens its easier to imagine him changing his mind.

I wonder how many men would be fine with a more pocketable phone - one that's got a smaller screen but carries as much battery life because it's thicker? Apple can keep the margins high on such a device by starting SKUs at 128Gb or even 256Gb - like an iPhone mini.
 
But one thing is for sure the battery life will blow away the battery life on the 6s, as well as the camera.

better battery life would be nice. but it's all with trade offs... iphone 6s never gets stolen...
 
Look, you are bewilder about the original SE as a budget model and it's clearly not about the price. People are interested in SE due to the smaller form factor with newer specs.
At $349/399, and reusing old parts from the 5s, the SE was clearly a budget model. They had the flagship 6s at $649, and the flagship 6s Plus at $749.

If they had wanted, they certainly could have introduced a flagship 4.0” iPhone at $549 or so. But they didn’t. Instead, they introduced a budget model that left off high end features except the SoC and rear camera—so it could be sold at $349/399.

Sure, some bought the SE because it was small sized. But many bought because it was the least expensive iPhone available.

I bought two of them myself, because they were low priced. If I could have gotten a 4.7” or 5.5” iPhone for the price of an SE, I would have bought one of those instead.
 
At $349/399, and reusing old parts from the 5s, the SE was clearly a budget model. They had the flagship 6s at $649, and the flagship 6s Plus at $749.

If they had wanted, they certainly could have introduced a flagship 4.0” iPhone at $549 or so. But they didn’t. Instead, they introduced a budget model that left off high end features except the SoC and rear camera—so it could be sold at $349/399.

Sure, some bought the SE because it was small sized. But many bought because it was the least expensive iPhone available.

I bought two of them myself, because they were low priced. If I could have gotten a 4.7” or 5.5” iPhone for the price of an SE, I would have bought one of those instead.

You are thinking it's a budget model but that's not really the case and the SE get a price drop due to lower production cost and Apple clearly stated that the update is for 4” display with the spec of newer SoC.
 
At $349/399, and reusing old parts from the 5s, the SE was clearly a budget model. They had the flagship 6s at $649, and the flagship 6s Plus at $749.

If they had wanted, they certainly could have introduced a flagship 4.0” iPhone at $549 or so. But they didn’t. Instead, they introduced a budget model that left off high end features except the SoC and rear camera—so it could be sold at $349/399.

Sure, some bought the SE because it was small sized. But many bought because it was the least expensive iPhone available.

I bought two of them myself, because they were low priced. If I could have gotten a 4.7” or 5.5” iPhone for the price of an SE, I would have bought one of those instead.

I like a small phone too, but a cheap phone is just as good.

I would be encouraged by the release of an iPhone 9/SE because at third party retailers it's possible to pick up an iPhone 7 at the moment for as little as £279. With the release with the release of an A13 powered iPhone 9/SE it would be very interesting to see if the iPhone 8 could reach that level at third party retailers. For reference at the moment it can be had for £449. A price point in the UK very likely to be occupied by the 9/SE.

I'd estimate an immediate price cut at those third party retailers followed by price erosion for the rest of the year. The A11 CPU and 2Gb of RAM makes the 8 a still capable budget phone for people who aren't interested in highest possible performance.
 
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