Apple is all set to disrupt the affordable flagship market with the iPhone SE (2020)

In 2016, I had written about the iPhone SE saying it will take the market by storm at that price point. Today the smartphone market is very different, the only constants being that it continues to be fragmented, and Apple continues to sustain its positioning. What has changed substantially is that today the smartphone prices have hit the roof with $1000 flagships being accepted as the norm. This is the prime reason why Apple’s proposition with the SE at $400, makes such a compelling case for itself than ever before.

iPhones have never been bad devices. The price to feature ratio was at times ridiculous compared to Android devices and hence budget brands tried to ape Apple’s designs, feature set and UI to be able to make a case for a cheaper iPhone alternative. Today the tides have changed manifold. The iPhone SE 2020, still priced at $400, is really questioning the existence of an “affordable flagship” at $600 to $800. But this time they are not in the market to take on competition but to obliterate them. 

Here are 10 reasons that makes me believe this device will strike the right chord with the average consumer– 

1.      True flagship performance – The SE is powered by the same flagship A13 bionic chipset that you find in the $1000+ iPhone 11 flagships. Considering that Apple hasn’t underclocked this chipset, you are effectively getting the most powerful smartphone processor at just $400. Add to that Wi-Fi 6 and Gigabit-class LTE, Apple hasn’t really skimped on specifications in its budget offering.

2.      Wireless charging a feature restricted to the more expensive devices – Wireless charging is a fantastic feature especially for countries like the US, where a wireless charging dock or table is present just about everywhere. With device charging being one of the more pain staking tasks of using a modern smartphone, a wireless charger literally leaves the device always on without the need to charge the device for days. What makes it all the more special is that there are hardly any devices that offer wireless charging at this price point.

3. IP67 ingress protection – Again, this is another feature that hasn’t trickled down to the affordable flagship segment till date. In fact, OnePlus for the first time offered ingress protection in its recently launched OnePlus 8 pro, which starts at $899, while not offering it in its $699 priced OnePlus 8. I am even beginning to wonder if there has been any other tier one brand that has thrown all but the kitchen sink at this price point like Apple has. 

4. Unrivaled video camera – While I did talk about the flagship processor, one of the key elements of the processor is its Image Signal Processing (ISP). Apple’s ISP is top notch and has been one of the key contributors towards its industry leading camera performance. The flagship ISP and Neural Engine for computation photography, coupled with what Apple claims as the best single camera sensor they have ever equipped an iPhone with, the photo and video quality would compete well with the affordable editions of the pixel devices, that lead the camera race quite comprehensively at this price point. But one aspect in the camera department where Apple holds the pole position is video. The 4K 60 FPS-capable camera is expected to live up to Apple’s reputation of offering one of the best video cameras ever on a smartphone.

5. The perfect device size – its no surprise that the original SE helped Apple reclaim its lost market share. With Apple realizing that iPhone users stuck to their older devices shying away from the bigger, redesigned iPhones, they introduced the SE to cater to that audience. Fast forward to 2020, we have the exact same situation where most devices are closer to 7 inches erasing the difference between tablets and smartphones. The SE 2 again comes in as a savior to cater to customers who love the compact form factor and do not want to spend an arm and a limb to buy a smartphone. 

6. Uncontested software support – One avenue that most affordable flagship smartphones fail is software support. In fact, when we do the math on the actual cost of owning a smartphone over its lifetime, iPhones do far better than any other smartphone across price points. In Android land the most you could expect is 4 years of software support and this is usually restricted to the pixel line of devices from Google. This, for me, is an absolute USP for customers who look to hold on to their smartphones for a longer duration. As an example, the 2016 released iPhone 7 is currently running iOS 13, the latest from Apple, as against a Galaxy S7 smartphone launched the same year which runs a two-year-old version of Android (Oreo 8.0). 

7. Nostalgic home button and touch ID – As much as people may rave about Face ID, Touch ID was by far the best biometric authentication that was both convenient and secure. Most people who will be looking to upgrade to this device would be using either the original SE or the iPhone 8, the last device with Apple’s Touch ID. The customers who are used to Touch ID will feel very much at home, and as per user feedback, Touch ID is a lot more practical than Face ID in most use cases. 

8. Getting the positioning right, once again – Apple is by far the only brand that can afford to do almost anything and still reclaim its position of being a premium smartphone brand. With the new SE, they have got the positioning bang on. The iPhone SE is a compact smartphone with limited compromises and at a budget. After the iPhone 5C debacle, Apple has really got their positioning spot on. People are not looking for a cheaper iPhone. They are looking for a more compact and an affordable iPhone. Apple has made a fantastic move by launching the SE few months after launching its flagships. In fact, for a brand that does massive launch events, planning just a press announcement to launch the SE shows that this is a low-key affair for Apple - Yes, there is an iPhone SE, but our flagship is still the 11 series of devices. This will once again give Apple a tremendous opportunity to get customers to their stores as well as push their 11 series flagships as appropriate. 

9. Unchanged price – an iPhone at $400 in 2020 – At a point when smartphone prices are spiraling due to component costs, the SE really stabs not just the $400 segment but a segment above it. The $600 segment will be the biggest victim of this launch because everybody wants to own an iPhone and getting it $400 makes the deal all the more sweet. As I had said in my 2016 article, I can’t think of a better device that offers a premium experience and still not compromise significantly on features and specifications. Add to that a huge number of iPhone SE and iPhone 8 users looking to upgrade to a more practical device. If the supply side of things is managed well by Apple, this could be the device that will get Apple back on top of the smartphone market share race

10. Macro-economic factors – With a financial downturn looming, and people looking to hold on to their money and be more watchful with their spends, the budget smartphone segment will have a lot more takers than before. With smartphones becoming as important as essential commodities, people are going to continue buying devices periodically, and no downturn could potentially stun budget smartphone sales. The current macro-economic factors too could play a significant role in driving customers to Apple’s affordable alternatives as against $600 to $800 Android alternatives.  

Usually at the $400 price point, we would see most of the big brands skimp on few essential features, restricting it to the expensive devices. This move by Apple is very different, very unlike an established brand and really giving the so called budget brands a taste of their own medicine. For any average smartphone user, who uses the device for productivity and media consumption, this is a true affordable flagship with the least compromises. So, what are these compromises –

1.      A retina HD display – to be fair to Apple, but for the HD resolution, the Dolby Vision certified True Tone display will be adequate for most of the customers. The reason why I call it a compromise is that in 2020, phones are equipped with quad HD or at least full HD panels. The average customer will not see a difference unless he/she tries hard to pixel peep. But this is still a con for a device launched in 2020.

2.      Dated design – Again, this may not be as big a factor for a lot of people, but design aesthetics is an important purchase criteria in 2020. With the market flooded with modern bezel-less full screen displays, having a dormant slab (bezels) above the display indeed looks archaic amongst the current crop of smartphones. Again, not a deal breaker.

3.      No 5G – 5G is in its nascent stages with penetration at a bare minimum. Conservative estimates suggest that a complete 5G roll out could be at least a couple of years away from becoming mainstream. While future proofing will be an argument against the SE, its still too premature a conversation at this point in time. Add to that, there are no phones in that budget that are 5G ready, so this once again is not a deal breaker

4.      Small battery – The standard battery size in 2020 is about 4000mah, and the iPhone SE is rumored to be equipped with a measly 1821 mah battery. While just battery size doesn’t translate to better battery life, the statistics shared by Apple themselves isn't great by 2020 standards. Deal breaker – I would say ‘maybe’ in this case, especially after calling it one of the best multimedia smartphones in this price point. I am eagerly waiting for the real life battery endurance ratings to see how Apple has optimized the device to last longer despite the battery size.

Despite these “compromises”, the iPhone SE offers the most compelling proposition at the $400 price point. It has been a long time since we have seen a true disruptor in the smartphone industry, and it was least expected that Apple would be triggering this. The SE will force leading smartphone companies to rethink their pricing and positioning strategies. Being forced to a sub-bar software experience, this could also be a moment where a huge legion of budget Android device users transition to Apple’s ecosystem, considering that their biggest barrier in price has been removed. 

I am indeed eagerly waiting to see how the iPhone SE is going to perform, specifically in the US, considering the prices across other countries don’t seem as compelling. The affordable smartphone segment hasn’t looked this exciting and the last time I was this excited was when OnePlus flagships were considered affordable. 

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