Apple bets new 4-inch iPhone to draw big-screen converts in China, India

Wed Mar 23, 2016 5:37am EDT
 
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By Mari Saito and Himank Sharma

CUPERTINO, Calif/MUMBAI (Reuters) - Apple Inc (AAPL.O: Quote) is betting a new 4-inch iPhone will spur smartphone users in key markets such as China and India to ditch their larger-screens in favor of the diminutive, yet feature-rich and lower-priced iPhone SE.

The plan, if successful, will pose a challenge to its Asian competitors such as Huawei Technologies [HWT.UL] and Xiaomi[XTC.UL] which have been churning out big-screen phones to win market share in the crowded mid-range and near-premium segments.

"With the iPhone SE, Apple is choosing to aim at an under-served segment of consumers that prefer small screen smartphones and have been reluctant to upgrade," research firm IHS said in a note.

"Importantly, Apple's competitors have chosen not to target the premium compact smartphone market."

Users will be more willing to ditch their larger screens if Apple's smaller phone can match-up in features, analysts said.

"This will appeal to more people who otherwise couldn’t afford their flagship phone. This will make the market more competitive at that price point as Apple is preparing to take more share,” said Anshul Gupta, research director at Gartner.

The pricing, along with the features, is for the first time likely to pit Apple directly against phones made by companies such as Oppo, One Plus and Xiaomi, analysts said.

"Apple iPhone SE will target feature phone upgraders, first-time smartphone buyers and prepaid consumers in Asia who cannot afford, or are not familiar with, bigger-screen smartphones," said Neil Mawston, an analyst at Strategy Analytics.   Continued...

 
Apple Vice President Greg Joswiak introduces the iPhone SE during an event at the Apple headquarters in Cupertino, California March 21, 2016.  REUTERS/Stephen Lam