​iPhone SE: Is Apple following Sony Mobile’s compact smartphone lead?

​iPhone SE: Is Apple following Sony Mobile’s compact smartphone lead?

“This is a shrewd move by Apple."

Apple announced its latest smartphone, the iPhone SE, at a low-key on campus event last week, in a break from their traditional September product announcements.

With the dust now settled, the official party line coming out of Cupertino is that the iPhone SE is a “compact smartphone”.

“The iPhone SE is essentially an upgrade of the popular iPhone 5s which still features prominently in the SpecTRAX Shelf Share Top 5 Smartphones list almost three years after launch,” says Phill Maling, Research Analyst, Strategy Analytics.

“Apple increased its smartphone display size with the launch of the iPhone 6 (4.7 inches) and iPhone 6 Plus (5.5 inches) and continued with this theme with the launch of the iPhone 6s and iPhone 6s Plus.”

With the iPhone 5s still ranking well in terms of sales and availability, Maling believes the ageing handset needed an overhaul to compete with today’s smartphones.

“Apple has taken its cutting edge A9 64-bit dual-core processor and 12MP camera (seen in the iPhone 6s and iPhone 6s Plus) and combined them in an affordable, 4 inch smartphone,” Maling adds.

“For vendors such as Samsung, LG and HTC the “compact” or “mini” variants of their flagship products are usually a compromise between specifications and pricing; the processor and camera modules are normally the main downgrades.”

Maling says Sony Mobile differentiated itself back in Jan 2014 coining the term “compact smartphone” with the launch of the Xperia Z1 Compact.

The Z1 Compact featured the same Snapdragon 800 SoC and camera module as the Xperia Z1 (launched three months earlier, in September 2013).

“Sony Mobile continued this strategy with its next generation products, Xperia Z2 Compact, Xperia Z3 Compact and now the Xperia Z5 Compact,” Maling adds.

“Apple dominates the premium smartphone price tier (>500USD) with its flagship models. Legacy products (>two years old) fall into the lower price tiers in a stepwise fashion as new products launch.

“The iPhone SE announcement means Apple has broken with tradition and has intentionally targeted the mid-tier smartphone market at product launch.”

Evolution, not revolution?

Delving deeper, Strategy Analytics Research Analyst Neil Mawston believes the iPhone SE is an evolution, not revolution, for Apple.

“The iPhone SE will help Apple to grow slightly this year, and bridge the gap until the next "iPhone 7" launch in H2 2016, but it is not a revenue blockbuster for the company,” Mawston adds.

Mawston believes the iPhone SE formalises and replaces the legacy iPhone 5 to 6 models with 4-inch screens that have been selling globally already for the past several years.

“This is a shrewd move by Apple. Apple is repackaging prior smartphone models and engines at new price-points,” Mawston adds.

“The iPhone SE will certainly help Apple to penetrate deeper into emerging markets, like India, China and Indonesia.”

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