Has Apple Bitten Off More Than It Can Chew With iPhone SE?

Early trends suggest that the new iPhone isn’t exactly hot in the market

Has Apple Bitten Off More Than It Can Chew With iPhone SE?

At Techtree, we have consistently maintained that there are only two kinds of smart phone users in this world – those who swear by the iPhone and those who swear at it. With Apple’s latest ‘small phone’ hitting the Indian market, the trend became even more marked.

For starters, the fan boys began surfing data across all possible sources to suggest that the iPhone SE wasn’t the damp squib that everyone else was making it out to be. Contributor Chuck Jones claimed in his article on Forbes (read it here) that lead times for buying the new phone had lengthened with several stores in the US reporting a sell-out.

He further argues that new iPhones have a headwind from there being a larger install base of iPhones with success based on usage percentage. “When comparing the iPhone SE to the iPhone 5c and 5S, the iPhone install base is probably two times larger if you assume the 896 million cumulative unit sales has the same percentage of active devices versus the 421 million that had been sold by September 2013.”

Price Barrier

Of course, the antagonists believe that all this is pure hogwash. They claim that Apple is delivering a sucker punch by pricing the iPhone SE at Rs.39000 ($586) inclusive of local taxes, a premium of 36% over what it charges customers in the United States.

They also debunk Apple CEO Tim Cook’s grandiose announcements about the iPhone SE holding all of the iPhone 6S in a smaller package. Analysts point to two distinct reasons for making this claim – (a) Indians are now preferring big screen than better processors (look at the success of Xiaomi brands) and (b) they can lay their hands on an iPhone 6 for a cheaper cost.

It may be recalled that Cook had indicated that Apple was betting on strong growth in India, which currently forms only a tiny part of the company’s sales. In 2015, the company shipped 1.9 million phones, accounting for a 2% market share as against 14% that Apple accounts for globally.

Early Reactions

Early sales indicators suggest the antagonists got it right this time and iPhone SE is not exactly hot on shelves. Post its launch last week, the company managed to provide only about 2000 units against poor pre-bookings and cash-back offers. Despite this, retailers said they had adequate stocks in the evening.

“What’s the big idea here? First you get us used to a large phone with a big screen and then you get into reverse gear by launching a smaller phone, trying to sell us the idea that it is equivalent to the iPhone 6S,” says the manager of a store in Bengaluru.

A report published in the Economic Times (read it here) quotes Tarun Pathak of Counterpoint Technology Market Research to suggest that despite claims of the iPhone SE being targeted at the emerging markets, it is actually not the case. “End users are comparing it with the iPhone 5S and finding it too expensive,” he is quoted as saying.

Of course, there are others who believe that the new launch could add as many as 15 million more sales during the current year. A report in Apple Insider quoting an analyst at RBC Capital Markets says not only is the iPhone SE hard to find online line or offline, the earliest delivery dates too have been pushed back by two weeks.

Bluetooth Challenge

Even as Apple is grappling with the pricing issue in India, some reports about malfunctioning Bluetooth phone calls have added to the challenge. The challenge, as reported across Apple Support Communities relates to distorted and static-ridden or inaudible phone calls while using Bluetooth on the iPhone SE.

The early adapters were quick to compare this distortion with the earlier models where they experienced crystal clear audio quality. Available information suggests that the issues is affecting all iPhone SE models running iOS 9.3 or 9.3.1 and regardless of carriers or models. The malaise has been reported from the US, Australia, Canada, Germany and other countries.

A report published in Macrumors.com says there is no clarity on whether the issue is rooted in software or hardware. “A number of affected customers have attempted basic troubleshooting without success, including restoring the iPhone SE, resetting network settings, un-pairing and re-pairing the device, toggling cellular data and changing SIM cards,” the report said.

What next?

While the technology related issues could have an impact in the medium term with Apple’s Indian users, the pricing of the iPhone SE has definitely raised a few sniggers amongst detractors and some concerns among the fans. Experts believe that the pricing could soften in the near future as Apple has been less rigid with its policies and offers more flexibility to its channel partners in India, perhaps more than it does in any other country.

So, it may be a good idea to keep away from the new phone for a few weeks more. Because, if Tim Cook really wants to expand Apple’s reach in India he would have to sell the iPhone SE for a few dollars less. Of course, it is another matter that Apple may never acknowledge the discounts officially. 

Tags : iPhone SE