Will Apple Keep the Old iPhone SE Around at a Lower Cost?

[MacRumors]

Apple is rumored to be introducing an upgraded version of the iPhone SE as soon as March 8, the prospective date of the company's first event of 2022. The new iPhone SE is expected to be priced at $399 and it will be replacing the current iPhone SE, but will Apple keep the older model around and drop the price as it sometimes does when new iPhones come out?

In his most recent "Power On" newsletter, Bloomberg's Mark Gurman suggested that Apple could potentially keep the 2020 iPhone SE around, dropping the price to somewhere around $199. At this price point, Apple would be able to capture market share in places like Africa, India, and South America, where people gravitate toward lower-cost Android devices.

Apple has never had a sub-$200 iPhone before, with the entry-level $399 iPhone SE positioned as the cheapest iPhone that's been released to date, but as Gurman suggests, component costs are low enough that Apple might be willing to consider an even more affordable iPhone option.

Bill-of-material estimates from two years ago pegged the hardware cost of the iPhone SE at around $200, meaning a $199 price tag would be a money-loser. But time and economies of scale have probably made that cost much lower by now. Would the cost be low enough for Apple to earn its typical profit margins? No, but the chance to sell services and other products to big new markets could make up for that.

Most of Apple's focus is on its flagship devices, with Apple never seriously targeting the low-end smartphone market, but Apple is known for keeping older iPhones around and offering them at more affordable price points when introducing new devices. With the iPhone 13, for example, Apple dropped the price of the iPhone 12 and kept it around. 2019's iPhone 11 is also still available for purchase, and at $499, is Apple's most affordable device next to the iPhone SE.

Gurman argues that if Apple does end up keeping the old iPhone SE around and selling it for a ~$199 price point, Apple could see notable sales in developing markets and create long-term services revenue while growing the iOS ecosystem.

Such a device would also allow Apple to replace the long outdated iPod touch, which has gone several years without an update. The iPod touch has seen no updates since 2019 and is still using an A10 Fusion chip. Apple sells the 32GB iPod touch for $199, so a $199 iPhone SE would be a solid replacement.

Gurman has confirmed that there is no sign that Apple actually plans to keep the older iPhone SE around as a lower cost alternative, but it's clear there's incentive. Either way, Apple is poised to bring us a new iPhone SE that features the same general design but chip upgrades and 5G connectivity.

Well-respected Apple analyst Ming-Chi Kuo has said that the 2022 iPhone SE will be Apple's cheapest 5G iPhone to date, bringing faster connectivity to millions of people at an affordable price point.

Article Link: Will Apple Keep the Old iPhone SE Around at a Lower Cost?

 

[now i see it]

My guess: previous SE goes bye-bye after the new one drops.
It’s getting too cheap for the board of directors.

 

[Shanghaichica]

If Apple have a £199 iPhone I feel sorry for Android.

 

[ghanwani]

No, they won’t.

 

[TheYayAreaLiving 🎗️]

Personally, I don’t believe an iPhone costing $199 will ever happen. I don't see Apple offering 5G on a $199 iPhone device.

That is the iPod Touch price range.

 

[ghanwani]

If Apple have a £199 iPhone I feel sorry for Android.

Why?

 

[Lounge vibes 05]

It would be really cool.
A $199 iPhone would be truly a fantastic product.
Even a $299 iPhone SE would be absolutely fantastic, and could still easily replace the old aging iPod touch.
But this is Apple.
What’s more likely is that they completely discontinue the 2020 SE, and the new one just replaces it.
Another very likely possibility is that they keep around the current SE at $399, and just price the 5G model at $499. I think that’s also very likely, and it would just replace the 11.

 

[ArtOfWarfare]

Apple has never had a sub-$200 iPhone before, with the entry-level $399 iPhone SE positioned as the cheapest iPhone that's been released to date

Didn't Apple sell the original iPhone for $199 less than a year after it was released?

Edit: Ok, I had remembered Apple making two price adjustments, from $599 to $399 and then I thought there was a second price adjustment of $200 more.

But actually the second price adjustment was from $399 to $499, which coincided with raising the storage from 8 GB to 16 GB.

So I guess $399 is the cheapest an iPhone new from Apple has ever been.

Second Edit: Wait, I was right the first time! At the second price adjustment, Apple set the prices to $199 for 4 GB and $499 for 16 GB. So it was possible to get a brand new iPhone, latest gen (only gen), for $199 at one point in time.

 

[Paddle1]

The rumored SE sounds too similar to the 2020 version to have both. Plus that's the iPod touch's price point.

 

[lazyrighteye]

Personally, I don’t believe an iPhone costing $199 will ever happen. I don't see Apple offering 5G on a $199 iPhone device.

That is the iPod Touch price range.

Fully agree.
Apple'd rather not have an iPhone SE than sell it for $199.

 

[Shanghaichica]

Why?

Because they will have strong competition for their bread and butter market in developing countries. I'm nit taking about high end android phones. People buy those because they like them. However the budget android phones are bought for their price alone.

 

[lazyrighteye]

Didn't Apple sell the original iPhone for $199 less than a year after it was released?

I don't recall. Did it really drop from $599 (I believe that's what I paid for my launch day device) to $199 in a year??

 

[Juanchi007]

I have…extensive thoughts. Long story short, I believe they’ll keep the 4G SE at $299 (not $199 like Gurman hopes) with the new 5G SE at $399. Then, if the SE Plus ever drops in 2023/2024 it will come in at $399 while the old 5G and 4G SE will lower another $100.

 

[webkit]

Didn't Apple sell the original iPhone for $199 less than a year after it was released?

Yes, the 8GB price dropped from $599 to $199 in about a year but those prices required a 2-year AT&T contract. The retail prices would've been higher without the contract requirements.

 

[one more]

Personally, I don’t believe an iPhone costing $199 will ever happen. I don't see Apple offering 5G on a $199 iPhone device.

That is the iPod Touch price range.

That article suggests that the current 2020 iPhone SE (4G) might drop to $199, while its 2022 5G refresh will still sell for $399, as usual. We should know for sure in about a week.

 

[satchmo]

Fully agree.
Apple'd rather not have an iPhone SE than sell it for $199.

Any reason why?

I'm sure there are many who would love this lower price, especially for their kids.

 

[jimimac71]

It would be really cool.
A $199 iPhone would be truly a fantastic product.
Even a $299 iPhone SE would be absolutely fantastic, and could still easily replace the old aging iPod touch.
But this is Apple.
What’s more likely is that they completely discontinue the 2020 SE, and the new one just replaces it.
Another very likely possibility is that they keep around the current SE at $399, and just price the 5G model at $499. I think that’s also very likely, and it would just replace the 11.

Why sell a $199 iPhone unless the iPod Touch is history?
Would Apple sell a 32GB iPhone (like iPod Touch)?
$199 just isn’t in Apple’s DNA. <grin>

 

[Juanchi007]

Any reason why?

I'm sure there are many who would love this lower price, especially for their kids.

Exactly, a $199 iPhone SE would be perfect for the iPod Touch market, Android holdout market, and emerging markets (eg India) while leading to drastically increased services revenue. So long as the $199 iPhone isn’t trashy and doesn’t mess with their brand identity (like the iPhone 5C) Apple should want to do this.

 

[lazyrighteye]

Any reason why?

I'm sure there are many who would love this lower price, especially for their kids.

Oh I don't at all doubt users would love the $199 price point. As a father of a pre-teen iPhone-wanting son, I would be too! That price point, from a brand perception perspective, is not where I think Apple is interested in landing for an iPhone. 😊

 

[Heat_Fan89]

If Apple have a £199 iPhone I feel sorry for Android.

Umm, no. That's just wishful thinking. Two separate platforms. There are some who don't want anything to do with Android and there are some who don't want anything to do with iOS. I personally would like to try an iPhone but can't because it doesn't have a Call Screener with Google Assistant. Most the Apps I use, I prefer Google's, they just do a much better job.

 

[TheYayAreaLiving 🎗️]

That article suggests that the current 2020 iPhone SE (4G) might drop to $199, while its 2022 5G refresh will still sell for $399, as usual. We should know for sure in about a week.

That’s still an opinion by Gurman. Notice how he mentioned the word “somewhere”. Playing it safe. If that was the case so I can expect a 2023 iPhone SE for $199 since it will be a year old?

 

[Shanghaichica]

Umm, no. That's just wishful thinking. Two separate platforms. There are some who don't want anything to do with Android and there are some who don't want anything to do with iOS. I personally would like to try an iPhone but can't because it doesn't have a Call Screener with Google Assistant. Most the Apps I use, I prefer Google's, they just do a much better job.

The $199 android phones don't have call screener on there. Isn't that a pixel exclusive feature? Yes at the high end those that chose an android phone prefer it over iOS. However at the budget end they pick whatever they can afford. The price is the determining factor.

 

[JPack]

Zero chance of that happening.

Remember Apple is still diverting chips from iPad to iPhone. That's why $329 iPad deliveries face a 4-5 week shipping delay even today. So why would Apple lower iPhone to $199?

More importantly, $199 still doesn't buy a big 6" display for those price sensitive SE customers. That's why Android wins for developing countries. And those SE customers certainly aren't going to sign up for expensive Apple services.

 

[Sir_Macs_A_Lot]

Yes, the 8GB price dropped from $599 to $199 in about a year but those prices required a 2-year AT&T contract. The retail prices would've been higher without the contract requirements.

I bought the original iPhone (8GB) from Apple for under $250 and used a workaround to avoid the AT&T contract. I still have it and the battery surprisingly still holds a charge.

 

[Heat_Fan89]

The $199 android phones don't have call screener on there. Isn't that a pixel exclusive feature? Yes at the high end those that chose an android phone prefer it over iOS. However at the budget end they pick whatever they can afford. The price is the determining factor.

Yes and no. The budget Motorola phones also have the Call Screener feature because they are basically running stock Android. The Call Screener has essentially stopped 98% of my Spam calls. I used to average about 200 per month. And now I get maybe 2-3 that slip through.