Can the SE keep Apple relevant during the market slump?

With the release of Apple's new cheap(ish) iPhone SE model, a Futuresource Consulting research analyst says the move is likely to improve Apple's appeal to a wider range of consumers.

"While the timing of this release has coincided with the beginnings of a global economic slowdown, the handset's launch is designed to expand Apple's footprint into more price-conscious consumer demographics and geographies, increasing volumes through tapping into market segments where Apple's premium handsets are often unattainable," analyst Stephen Mears explains.

"However, the timing of Apple's release, in a period where consumers are reducing discretionary spending due to the economic shock of the COVID-19 pandemic, means the handset ... could potentially become a key handset for 2020.

While the SE has many of the features of the higher-spec iPhone models, including the A13 Bionic system-on-a-chip and latest machine learning-driven camera software, Mears points out that the design is reminiscent of an older generation with top and bottom bezels and the home button.

At just 4.7 inches, the SE's display is also pretty small in comparison to smartphones from other vendors in the price range – for example, the Huawei P30 display is 6.1 inches.

"Viewed through a competitive landscape prism, the introduction of a new budget iPhone is an aggressive move designed to protect Apple's position and brand in the face of rising competition both from long-time rival Samsung and international Chinese vendors such as Huawei," Mears explains.

"While Huawei remains strong, having witnessed significant growth in its domestic market, its international footprint has contracted, leaving space for its rivals to grow in to. Samsung has already sought to capitalise on this, having aggressively marketed and promoted its A and M series of devices across key markets, and it is clear that Apple is looking to follow suit with the SE.

Mears highlights Apple's customer loyalty and expanded installed base as major reasons that the company can expect to succeed in this goal.

With the Watch and AirPods dominating in the wearables and hearables markets, as well as Apple TV+ and the ever-popular iPad, Mears sees the SE as an affordable in-road to the Apple ecosystem.

"As the fallout from the Coronavirus pandemic continues to unfold, with economic and human costs continuing to rise and an increasingly bleak outlook across markets taking hold, the SE release shows Apple's intent for this year – the vendor will continue to develop and promote its ecosystem," he states.

"While the vendor will need to maintain a gap between its flagship and mid-tier devices in terms of quality and range of specs in order to preserve its position as a premium brand, a regular iteration of a mid-tier device could act as the perfect supplement to Apple's extensive portfolio. Overall, 2020 is set to be a challenging year for many industries and vendors, yet it is quite possible that the release of the SE helps to somewhat insulate Apple from the current market turmoil.