The iPhone SE 2020: Not the best iPhone, yet the best smartphone now

The budget iPhone SE released last month is a good answer to respond to Apple’s decreasing market share and worldwide weak economy growth impacted by the COVID-19.

The iPhone SE 2020, which starts at $399 and keeps the same name as its 2016 predecessor, was not announced with a splashy staged event, but instead in a press release. Though it is the cheapest iPhone, it has the same processor and most of the same features as the flagship iPhone 11, including an A13 bionic chip.

The new SE uses a new imaging sensor with a 12-megapixel rear camera. It features Smart HDR that can enable or disable automatically, shoot stereo audio for video and has integrated video stabilization.

It is a good choice if people want a new cheap iPhone that will last a few years. And most importantly, it runs the iOS operating system which is what makes the iPhone so valuable.

This is the best phone which meet both the demands of customers and Apple. For the former, given the worldwide economy is heavily affected by the impact of the COVID-19 and many stores, including cellphone retailers’, are closed, it is not a good environment for people to purchase expensive electronics. A report released by Counterpoint Research said overall global sales of smartphones decreased by 13.9%, which showed weakness in the phone market as consumers became more cautious.

Source: Counterpoint Research Monthly Market Pulse, February 2020

Compared with a smartphone with Face ID which requires people to take masks off to unlock the phone, they might need the iPhone SE with Touch ID now.

For the latter, Apple’s problems include increasing competition with Asian counterparts such as Huawei, Xiaomi and Samsung and a relative decline in smartphone sales in recent years.

Apple used to be a market leader, however, is now facing a great challenge that the smartphone market has been disrupted by smaller, nimbler companies. Smartphone brands such as OPPO and Xiaomi offer inexpensive, low-end products at beginning and then improve their offerings to attract a more affluent market. Apple has not launched a 5G smartphone to be able to compete with its Asian counterparts.

Photo: Apple’s Newsroom

The smartphone penetration rate is already at 85% in rich countries, and the sales space of smartphones is still in emerging markets where people are more sensitive to prices, according to a report released by a research advisory firm Gartner.

Analysis by International Data Corporation (IDC) showed that Samsung still holds the top spot with 79 million smartphones shipped, meaning it grew its market share by around 8%. Huawei's position surged by 27%, while Apple’s share decreased by 0.6% relatively.

Source: IDC Quarterly Mobile Phone Tracker, Q3 2019, November 7, 2019

It seems like that the COVID-19 has accelerated the process of global economic recession, which has exacerbated competitive pressure and a weak market outlook of Apple as well.

Apple may have realized that it requires to change previous strategy to diversify customer base and increase sales. The cheap iPhone is absolutely a good move for the company. Apple needs a relatively budget phone with excellent value to compete with Asian rivals which offer many excellent Android phones priced at less than $400.