According to research from CIRP, the newly introduced Apple iPhone 16e raises questions about its position in Apple’s smartphone lineup. While it replaces the iPhone SE in terms of timing, its pricing and positioning suggest it is not meant to be an absolute entry-level phone. Instead, it appears to be a more affordable version of Apple’s latest models, much like the short-lived iPhone 12 and 13 mini. So, why should the Apple iPhone 16e be more successful than the mini.
Pricing and target audience
Apple has priced the iPhone 16e significantly higher than the discontinued iPhone SE, even though it remains the lowest-priced Apple iPhone in the current lineup. This suggests Apple intends to market it as a budget-conscious option within its latest series rather than an introductory model for first-time smartphone buyers or Android switchers. Identifying the exact target audience for the iPhone 16e remains a challenge.
Past struggles with lower-end models
A report from CIRP highlights Apple’s difficulty in selling lower-priced iPhones that are not flagship models. Since the reintroduction of the iPhone SE in 2020, Apple’s budget-friendly models, including the AppleiPhone SE and the mini versions of the iPhone 12 and 13, have accounted for less than 20% of total iPhone sales per quarter. In recent quarters, that share has dropped to just 5%.
The mini models failed to gain traction
Among Apple’s budget-conscious offerings, the mini models struggled the most. The iPhone 13 mini reached its highest sales share of 8% in Q3 2022, a time when customers were waiting for the latest Apple iPhone releases and price reductions on older models. However, for most quarters, the iPhone 12 and 13 minis remained at 3-6%, leading to their discontinuation after only two years.
Apple’s two-tier budget approach
Apple has long sought to attract price-sensitive buyers through two strategies: releasing lower-end models like the iPhone SE and continuing to sell previous flagship models at discounted prices. The latter strategy has been more successful, as older flagship models remain more appealing to customers than purpose-built budget models.
A new entry-level strategy?
The Apple iPhone 16e may represent a more structured approach to serving budget-conscious customers by offering a current model with annual updates rather than relying on older flagship models. If the Apple iPhone 16e succeeds in establishing itself as Apple’s true entry-level model, the company may reduce its dependence on selling previous-generation devices at reduced prices and it could become a real refurbish killer. Time will tell.
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