Why Apple May Be Forced to Release a Cheap iPhone 12

According to Juha Winter, associate director of global wireless practice at Strategy Analytics, the Android world was already forced to move to mid-tier pricing.

The world’s best-selling Android phone is now the Samsung Galaxy A51 – a mid-tier phone that retails for $ 599 and is less than half the price of Samsung’s premium wrinkle-free phone, the Note 20 Ultra, costs. Of all the top 10 best-selling Android phones in the second quarter of this year, not a single one was a “flagship,” said Winter.

Affordable upstart

“Given the global economy and the fact that so many people are affected by the COVID-19 pandemic, many consumers have postponed their decisions about replacing smartphones or … opting for cheaper alternatives that are ‘good enough’ instead of super expensive flagship models, ”he said.

So far, Apple has largely resisted this trend towards affordable alternatives. The premium iPhone 11 – which starts at $ 1200 in Australia – was the top-selling model of all phones in the second quarter, though the mid-range iPhone SE came in second, Winter said.

The differences between $ 1,800 phones and $ 800 phones are getting smaller and smaller for what most people want their phones to do.

– – Angus Kidman, Editor-in-Chief of Finder.com

Apple sells the iPhone SE for just $ 479 when you factor in a discount of up to $ 270 on old models.

“Apple looks very well positioned in the upper range, a level that is currently quite difficult for all other providers,” said Winter.

Australian research company Telsyte has reported a similar trend in the local market.

While the average price of an Android phone fell 10 percent in the first half of 2020 – now it’s $ 500, the lower end of the mid-range – the average price for iPhones fell by just 2 percent over the same period.

The best-selling iPhone in Australia was the premium iPhone 11, said Telsyte managing director Foad Fadaghi.

Still, he said, the mid-range iPhone SE did very well, accounting for 13 percent of all Australian iPhone sales, despite only being on sale for two of the six months that Telsyte was collecting numbers.

For the average consumer, there is no justification for spending that extra money.

– – Angus Kidman

Angus Kidman, editor-in-chief of phone comparison site Finder.com, said part of the reason Apple resisted the drop in prices of its phones was because it was better at “locking users into its ecosystem” than Android phone makers.

“As soon as people use something like that [Apple’s] FaceTime, they don’t want to jump to Android even though there are very, very similar options on Android, “he said.

“Apple has established itself really well as a premium brand. People who use the iPhone see themselves as premium users. Most Android users just don’t see that much joy. ”

What’s the difference of $ 1000?

However, advances in technology have dramatically closed the gap between what you get from a mid-tier phone and what you get from a premium phone, making it harder for all phone manufacturers to justify high prices.

“The differences between $ 1,800 phones and $ 800 phones are getting smaller and smaller for what most people want their phones to do,” Kidman said.

“When for most people your phone is the one you take photos with, communicate with apps, play a few games, and see no difference to these features when you buy it.” A phone for $ 1,800 or $ 2,000.

“There are things you can get on the $ 2,000 phone that you can’t get on the cheap phone, but many of them are things of questionable value. Whether we need foldable screens is in the air. I don’t think we’ve seen a great use case for them already.

“For the average consumer, there is no justification for spending that extra money.”

The cheaper phone trend has lasted five years – it was so long ago it was easy to justify buying the newest, best phone every year or two – but it wasn’t until this year that it really crystallized, Mr Kidman said.

In March, when it became clear that COVID-19 was becoming a global pandemic, traffic on Finder’s budget phone list suddenly doubled and interest has “increased since then”.

The question for Apple now is how long the worldwide love affair with cheap cell phones will last.