“Every once in a while, a revolutionary product comes along that changes everything”
This is how Steve Jobs introduced the iPhone in 2007. Industry has changed since then. What was once for a few, now sits in every pocket. Since 07, many brands have caught up to Apple in terms of tech and yet it rules the Global smartphone market.
In Q4 19, 1 in 5 smartphones sold was an iPhone. Apple sold about 212, 216 & 218M iPhones in 2016, 17 & 18 respectively. While huge, these numbers reflect a problem. Investors rain money when you have a huge growth prospect. From high 2-digits, iPhone sales growth has dropped down to <1%. Saturation in the US and China markets is a major reason for this stagnancy & Apple now has to look for growth in markets previously ignored (like India). However, 95% of phones sold in India are below $500. Until Feb, Apple offered phones at price points between $599 and $1500, a failed strategy in the developing markets.
Enter iPhone SE 2020
An iPhone costing $399 is a perfect price for such markets. The challenge now is that Apple is competing at a price range dominated by Xiaomi, Samsung & OnePlus. The success will hinge on if Apple can penetrate the markets which values “Wow features” & are privacy/quality agnostic -all far from Apple’s DNA.