Fresh Consumer Intelligence Research Partners (CIRP) data exploring Q2 iPhone sales shows that while 65% of devices sold are 11 series devices, the affordably priced iPhone SE now accounts for 19% of sales on its own.
What might this mean for the mobile enterprise?
What CIRP said:
“Every few years Apple comes out with a new low-priced iPhone, with up-to-date features, to sweep up the customers using the oldest iPhones,” said Mike Levin, CIRP Partner and Co-Founder in a press release.
“iPhone SE seems to have reached this specific segment of long-time iPhone users. Even though operating system switching has diminished in recent years, even more SE buyers came from within the iOS installed base compared to buyers for other iPhone models.
“And, in the quarter, SE buyers had really old phones, with almost three-quarters having an iPhone that was three years old or more. So, they upgraded from iPhone 5, 6, or 7 models, which meant these users really waited awhile to buy a new phone.
“These are users who evidently resisted upgrading to newer phones at more attractive price points, such as iPhone 11, last year’s iPhone XR, and even the iPhone 8 and 8 Plus, which launched in 2017, as its prices declined over the years.”
Value judgement
Unpacking this statement, it means:
- The iPhone SE is convincing some value-conscious Apple customers to upgrade.
- This has helped consolidate existing iOS usage.
- Apple’s high-end devices were perhaps too expensive for many customers, which has led many to stick with older iPhones for a while.
- There was pent-up demand for a more affordable Apple smartphone.
At the same time, Apple’s move to consolidate its customer base with the iPhone SE offers the following additional insights that should be of interest to mobile developers and the enterprise.
1. Avoiding platform confusion
Apple’s success in convincing owners of older iPhones to upgrade to the iPhone SE means that the majority of users are now running at least an A11 Bionic processor, which is likely to continue to support new operating systems for at least three years.
If you are a developer or an enterprise you now know that any apps or services you choose to provide to iPhone users will likely continue to work well across most currently active devices, so long as they support an A11 or later chip. That’s good because it means:
2. A level playing field for devs
The majority of Apple’s iPhone users now run devices that can easily handle the latest apps and operating system versions. As a result, developers and service providers can maintain high quality-of-service levels while customers can enjoy and share consistent application and device experiences.
The biggest point of difference across the company’s current range of devices is the camera – which for the present means high-level AR and photography solutions drive Apple’s high-end sales.
3. A price that’s right
With prices starting around $399 for the iPhone SE (2), Apple customers who have been pushing the usable life of the iPhones they own now have an acceptably priced upgrade. This makes particular sense to thrifty consumers using older and/or second-user devices – if they’ve enjoyed using their iPhone 5S they will more than likely feel comfortable upgrading to an iPhone SE. Doing so keeps them….
4. Consistent experiences and platform loyalty
Apple makes money selling the hardware, but add-on products and services help it maximize user revenues. As any enterprise offering any kind of service to mobile users surely recognizes, consistency is essential in the exchange, and this requires both suitable hardware and software development strategies designed to deliver across most currently employed devices.
This is what Apple has achieved with its affordable iPhone SE, and while this benefits all developers within the company ecosystem, it also boosts the lifetime value of each customer the company wins.
5. Keeping customers satisfied in the Apple Garden
The myth of the Apple Walled Garden is a prevailing one, but as Apple’s services become increasingly cross platform and as regulators and Apple itself loosen up these chains, the more apparent it becomes that the root of the Apple Business Plan is based on delivering consistent experiences that boost customer satisfaction levels.
Customers stick around because they want to be there.
Introduction of the iPhone SE gives Apple a route to convince existing clients to upgrade, giving it another chance to keep them entertained in the garden they already enjoy. Good experiences for them is good business for Apple.
6. The inevitability of life after smartphone
In truth, iPhones will be the brains of the mobile outfit for a while longer yet, but as the same processors slip into Macs and as the company continues to push into wearables, services and other accessories, the diversity of solutions powerful enough to drive Apple’s emerging digital experiences will expand even as the smartphone itself mutates into the next new thing.
The capacity to deliver a consistent basic experience absolutely provides the building block for such transmutation, providing a foundation for the inevitable future in which we experience life after iPhones. This is the true journey Apple is on.
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