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Apple’s multi-pronged iPhone play could be a hit with customers

“A smaller premium model with a mid-level price could be a huge seller for Apple in Australia, as it brings together multiple customer segments.”

Earlier this year Apple launched the iPhone SE at $749, a small retro-styled phone aimed at those with older models who needed an upgrade. But a smaller iPhone 12 might prove to be an even bigger draw for potential upgraders, especially if it’s priced low enough.

According to Telsyte’s data, around half of all iPhones sold during the first half of 2020 were under $1000, and yet the least expensive iPhone 11 came with a price tag of $1199. By finding ways to price brand new phones at $1000 or less Apple could maximise profit while also ensuring a greater percentage of in-use iPhones are compatible with its latest services and content.

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This year $999 has emerged as a sweet spot for premium smartphones, in contrast to the ballooning price tags of previous years. Samsung is selling a $999 version of its Galaxy S20 called the “Fan Edition”, while also addressing the lower cost market with its A series and the super premium market with its S20 Ultras and Notes. Meanwhile, Google has made $999 the upper limit of its 2020 range with the Pixel 5.

Mr Fadaghi said Apple’s share of the smartphone user base has been increasing over the past 18 months to its highest point in five years, 45.8 per cent. Apple was in a stronger position to maintain the momentum if it addressed both premium and lower end markets, he said.

This year’s iPhones are tipped to be redesigned to be squarer and lined with metal in a throwback to older models, and they’ll include 5G connectivity.

Though all other major smartphone-makers have introduced 5G models, many Apple users have been waiting for this year’s 5G iPhones to arrive before upgrading, said Tim Campbell, co-founder and chief investment officer at Longlead Capital Partners.

“Our clear view after speaking with numerous industry participants in Asia is that consumers have been waiting on 5G-enabled smartphones in order to upgrade their phones,” he said.

“Incremental 4G handsets last year didn’t really offer enough new functionality, so consumers waited. Our feedback is consumers are ready to buy.”

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