You may remember back in January this year, when financial reports for Apple’s Q1 quarter detailed their first ever drop in revenue since 2003. The electronics giant blamed a number of factors for the issue, citing currency problems and a softening of the market in China and other emerging markets.
This would all be well and good if we didn’t look at the huge elephant in the room here; Chinese OEMS are flourishing more than ever right now. Smartphone shipments for the country continue to grow every year, with the Q4 2015 results showing an 8% rise year-over-year and over 117 million handsets. This is backed up by the fact that far east companies are fast becoming major competitors within the mobile industry, with Huawei jumping to world number 3 last year and announcing over 100 million global handset sales. The recent launch of the Huawei P9 was an overwhelming success, with Communications Director for Huawei UK Ed Brewster stating that the overall reaction has been “very positive”.
“You were there, you saw the buzz. I think without the Panama Papers we probably could’ve been trending number 1 worldwide (on Twitter)”.
It’s true that the P9 has enjoyed a good amount of critical success, with even ourselves being impressed by its imaging capabilities and overall performance (even if the Leica glass is a bit of a gimmick). Huawei has been having global launches for quite a while now, starting with the P6, but this recent event in London felt bigger. There was more buzz, they had celebrities, the bravado was bigger than ever. If this isn’t a sign of a company enjoying its success we don’t know what is.
Meanwhile, Apple is busy expanding its line to cope with the dangers that lurk from all sides. Premium flagships will always have their place but they are quickly being replaced by affordable powerhouse devices that almost always come from… You guessed it… A Chinese OEM. The iPhone SE is a direct reflection of this and represents Apple’s attempts to try and create an affordable flagship competitor that retains the hardware from more powerful devices in the line but offers it at a lower price-point. Speaking to Kantar Consumer Insights Director Imran Choudhary, he believes that their decision to launch more devices is a result of changes happening across the globe, “In many developed markets, it is clear that there are fewer customers to attract to the brand and sustain strong growth. Instead the brand must broaden its appeal and the recent portfolio extensions of the Plus and SE are in line with this thinking.”
It’s pretty clear that the SE is aimed primarily at emerging markets but the problem will be convincing people to adopt. Apple has always prided itself as a premium phone manufacturer and their name is cemented as something that is expensive and not exactly ‘affordable’ For the company to even consider launching a budget handset is a bit of an oxymoron, since the company will never be associated with that price tier. Add to this that the price of an iPhone SE starts at £359 in the UK and you start to realise that this isn’t a cheap handset at all and actually has more in common with handsets such as the OnePlus. Unless the company goes ultra-cheap, it’s likely that they won’t get as much success as they perhaps wanted.
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