Why now is the best time for Apple to release a new iPhone SE (AAPL)

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• Apple hasn’t released a new budget smartphone since the iPhone SE debuted in 2016.
• Now that smartphone prices are higher than ever before, making it more difficult to convince consumers to upgrade, it’s the perfect time for Apple to release a low-cost iPhone.
• The competition could heat up quickly, as Google is rumored to be releasing a new cheaper Pixel phone shortly.
• Visit Business Insider’s homepage for more stories. 

Apple is likely to announce three new iPhones this fall that will succeed its current lineup. What we likely won’t see, however, is an update to the iPhone SE, the budget iPhone model Apple launched in 2016.

The iPhone SE was priced at $399, or $17 per month, when it launched, making it significantly cheaper than the iPhone 6S, which was priced at $27 per month when it was released.

Despite this lower price, the iPhone SE retained several of the key features of its pricier siblings. It had the same processor as the iPhone 6S and 6S Plus, it came with Apple’s Touch ID fingerprint sensor, and it had a 12-megapixel camera that could shoot 4K video. All of this was packaged in a portable design with a 4-inch screen that looked similar to the iPhone 5S.

But Apple no longer sells that iPhone, and it hasn’t released a new model since it launched the SE more than three years ago. With smartphone prices reaching all-time highs as consumers hold onto their devices for longer periods of time, a new low-cost iPhone SE could fill a critical gap in Apple’s current lineup. 

Here’s a look at why now is the right time for Apple to release a new iPhone SE. 

SEE ALSO: Everything we know about the new AirPods Apple could release later this year

Demand for expensive, high-end smartphones is slowing.

The smartphone industry is facing a global downturn, and gadget makers like Apple and Google are feeling the repercussions.

Global smartphone sales declined by 6.6% year-over-year in the first quarter of 2019, according to the International Data Corporation. This affected the United States smartphone market most of all, with smartphone volumes declining by 15% year-over-year as consumers are holding onto their devices for longer periods of time. 

A report from Gartner also suggests that consumers aren’t as interested in pricey, top-tier smartphone models as they are in more affordable options. “Demand for entry-level and mid-price smartphones remained strong across markets, but demand for high-end smartphones continued to slow in the fourth quarter of 2018,” Anshul Gupta, a senior research director at Gartner, wrote in February. “Slowing incremental innovation at the high end, coupled with price increases, deterred replacement decisions for high-end smartphones.”

Apple does sell the iPhone 7 for $449, which is less than half the price of the base iPhone XS model. But the A10 processor in the iPhone 7 is two generations old compared to the iPhone XS’ A12 Bionic chip.

If Apple were to release a new version of the SE that runs on the company’s latest processors and features a more advanced camera like the one on the iPhone XR, it has the potential to be a hit. 

The iPhone SE was well-received.

There’s one obvious reason to bring back the iPhone SE: people seemed to like it.

In 2017, the iPhone SE was the top-rated smartphone in terms of customer satisfaction, according to the American Customer Satisfaction Index.  That placed it ahead of pricier flagship rivals like the Galaxy S6 Edge Plus and even Apple’s own iPhone 7.

Reviews of the SE were also fairly positive when the phone launched in 2016. Business Insider called it “the best value of any smartphone,” while The Verge pointed out that it served an audience that other smartphone makers were missing. The Wall Street Journal’s Geoffrey Fowler wrote that he was “happy to see the iPhone SE” because “the world needs a small phone.” 

The competition could heat up soon.

Many of those points still hold true today: Those shopping for small, inexpensive smartphones have few options to choose from. And if Apple doesn’t address that market soon, surely another smartphone maker will.

Google, for example, is rumored to be working on a cheaper version of its Pixel smartphone that could debut at its developer conference on May 7. It’s expected to be much cheaper than the current versions of Google’s smartphone, as Russian tech blog Rezetked reports that it will cost between $400 and $500. The Pixel 3, by comparison, was priced at $800 when it launched, while the larger XL model was priced at $900. 

Apple has not mentioned any plans to release a new version of the iPhone SE. But it did release a budget version of the iPad in 2018 that’s priced at $329 and supports the Apple Pencil like the more expensive Pro models.

With that in mind, hopefully we’ll see Apple pursue a similar strategy with its iPhone lineup and introduce a new model for price-conscious consumers. 

See the rest of the story at Business Insider

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