Apple hopes small is big again as iPhone SE debuts

The new iPhone SE is seen on display during an event at the Apple headquarters in Cupertino, California 21 March - Reuters

Reuters: Apple Inc has launched its least expensive iPhone, the $ 399 iPhone SE, filling a hole in its product line-up with a small-screen model that targets new customers in emerging markets and fans of smaller phones as the company tries to reverse falling phone sales.

The low-key launch, held at the technology company’s Cupertino, California campus rather than its traditional splash at a much larger venue in San Francisco, did not wow tech experts or investors.

But the new mid-range model was seen as necessary to counter the dominance of cheaper phones running Google’s Android system.

Apple is hoping the cheaper model will stimulate overall iPhone sales, which it expects to decline this quarter for the first time since it essentially created the smartphone market nine years ago.

The new model did not allay investor concerns that Apple, which celebrates its 40th birthday on 1 April, has no obvious blockbusters in its pipeline.

The company showed off new wristbands for the Apple Watch and a new iPad Pro tablet at Monday’s event, and a robot called Liam to take apart old iPhones and reuse the materials.

But none of those moves generated much excitement among investors.

The iPhone SE’s 4-inch screen is the same size as the iPhone 5C, which fizzled and is no longer available on Apple’s online store. The iPhone 6S, which previously had the smallest screen of the sixth-generation line-up, is 4.7 inches.

The new phone has a 12-megapixel camera and starts at $ 399 for 16 GB of memory.

The model represents Apple’s second bid for the crowded mid-tier market after an unsuccessful foray three years ago. Orders start on Thursday, and the phone will be available next week.

The starting price is well below the $ 649 for the current top iPhone model without a contract, which is beyond the reach of many. With Apple’s vaunted A9 chip, the new phone is twice as fast as Apple’s previous attempt at an entry-level phone, launched in 2013. It also runs Apple Pay and comes in the wildly popular rose gold color.

The more compact phone design comes after Apple expanded the size of the screens in its high-end iPhone 6 and iPhone 6 Plus phones in 2014 to as large as 5.5 inches. That was broadly seen as an attempt to match rival Samsung Electronics with its large-screen Galaxy phones.

Apple is still expected to introduce a top-of-the-line, large-screen iPhone 7 late this year. The company now appears to be following a two-pronged approach to attack the top and the middle of the smartphone market.

Reaction to the multi-model strategy was mixed on social media.