Just in case you’ve been hanging out under a rock all, Apple announced a couple of new devices this and some fancy new watchbands. You’ll very likely hear lots about those devices and accessories over the next few weeks and months, and I’m sure Apple has a set of commercials ready to go on all of your favorite networks, so we won’t recap the event for you. But we will talk about Apple’s new, small iPhone SE and how dangerous it can be to Android OEMs.
The iPhone SE is essentially an iPhone 6 in a smaller form factor. It looks just like the old iPhone 5S but still has the top-notch A9 processor with Apple’s M9 motion co-processor that helps to take some of the workload off of the main CPU. The cameras are identical to the iPhone 6S, too, which means there’s a 12MP rear camera that’s capable of shooting 4K video, and Apple kept the 4-inch Retina display from the original iPhone 5S here. The newer features that Apple has brought to the table, like Live Photos and Apple Pay, are also present, which really does solidify the SE as a flagship in a small form factor.
If you’re like most people, you were probably a little puzzled as to why Apple would release a 4-inch phone in 2016. Every flagship that’s been announced recently is much, much larger, including Apple’s own 4.7-inch iPhone 6 and the 5.5-inch iPhone 6 Plus. People want bigger phones, not smaller phones.
Here’s the kicker, though; Apple sold 30 million 4-inch iPhones in 2015 alone. Granted, that’s spread out over more than one model of phone, but I promise you that most manufacturers would kill to sell more that many devices, especially when we’re talking about devices that were announced in 2013 or earlier. 30 million customers (in a single year!) is nothing to sneeze at, especially with how incredibly competitive and saturated the smartphone market is today. There’s clearly a market for these smaller devices, and it’s something that most OEMs, including Apple, have pretty much ignored over the past few years.
Now if there’s one thing that Android OEMs are good at, it’s reflexively designing and releasing phones to match the current demands of the market. There have been rumblings of a smaller Galaxy S7 Mini to compete with Apple’s iPhone SE, and Sony is usually good about keeping their Xperia Z Compact lineup updated. If this renaissance of smaller phones actually happens, there will certainly be more OEMs jumping on board, although most of them don’t have a great track record at making smaller versions of their flagship devices. Almost all of Samsung’s Galaxy S Mini line of phones have been incredibly disappointing, and that criticism also extends to HTC, LG, Motorola, et al.
The Xperia Z Compact line is mostly exempt from that, and if the specs hold up for the Galaxy S7 Mini, we’ll actually see some other phones that offer a smaller device with updated specs, not woefully outdated, underclocked processors from three years prior.
But the biggest problem with these “Mini” phones that OEMs release? They aren’t actually miniature. The Galaxy S7 Mini is rumored to sport a 4.6-inch screen, almost the size of Apple’s iPhone 6 and Samsung’s Galaxy S III that helped start the bigger phone movement. It’s mini in that it’s smaller than Samsung’s current flagship, sure, but it’s hardly going to be a small, compact phone. And for all the criticism that Apple will get in the next week for making too many iPhone sizes, how does that look to a consumer interested in a flagship Galaxy when the only difference between the Galaxy S7 and the S7 Mini is less than half an inch of screen size? Why even bother making the device at that point? Sony is guilty of this too, as the Xperia Z5 Compact has a 4.6-inch screen. It’s offset a bit by their use of on-screen buttons, but it’s still pretty close in size to the regular Z5.
Android OEMs are good at making plenty of designs, but if there’s one thing they almost universally suck at, it’s differentiation, and these smaller phones prove that. If there’s no difference between the smaller and bigger model, and the bigger model is only marginally bigger, why would anyone give the smaller device more than a passing glance? And they don’t, considering sales for these smaller phones had to have been abysmal since there aren’t many OEMs bothering with it anymore. And whatever the sales were, they certainly weren’t 30 million two years after their initial release.
If you want to get technical, you can look up the product dimensions of the Xperia Z5 Compact and the iPhone 5S and see that the Xperia Z5 Compact is only a bit taller than the iPhone 5S. It’s true, they’re pretty close in size (not identical, but close) in favor of the Xperia Z5 Compact, if you like bigger screens. But there’s the kicker: people don’t want big screens on medium-ish bodies with these phones. They want a small phone, and Android OEMs have completely ignored that. Now Apple is stepping back in with a small, compact device with incredible specs at an affordable price point, and they’ll continue to dominate that particular segment because there are few other OEMs willing to actually compete there, none of which have the pockets to compete with Apple. Looking at you, Samsung.
So Apple has managed to create a device that’s going to win back the smaller form factor market, although they’ve technically already done this. Apple stuck to their 4-inch screens while everyone else was making things bigger and brighter for many, many years, so this familiar territory for Tim Cook and company. That small screen will help, but it isn’t what’s going to hurt Android OEMs the most; what’s going to do the most damage is a combination of Apple’s fantastic unlocked phone policy, and the aggressive pricing of the iPhone SE.
If you’ve been keeping up with smartphone shipments lately, you’ve likely seen that unlocked phones grew a whopping 140% in 2015, far outpacing the actual growth of smartphones themselves. That means more and more customers are looking for unlocked options that aren’t tied to any specific carrier, and there’s a pretty strong correlation there with not-so-expensive phones, too. The iPhone SE hits that market, and it hits it hard.
First up is that unlocked thing. Right now, if you want an affordable, unlocked device, you buy an Android phone. Windows Phone gets a nod, since prepaid seems to be the only area where Microsoft has gained any traction, but for the most part, Android is the way to go. Outside of Microsoft’s dwindling lineup, there really aren’t that many options. Google’s Nexus phones are unlocked, which is nice, but they don’t work without problems 100% of the time. They’ll technically work on Verizon, for example, you’ll just have to activate a nano SIM with another phone then swap them because Verizon likes insane control over devices on their network. The iPhone doesn’t have those hoops to jump through, though; put your Verizon SIM card in and go. Call Verizon and add it to your plan. Move it to AT&T next week. Doesn’t matter.
Other great phones, like, say, the HTC One A9 or the OnePlus X, straight up don’t work on Verizon. They don’t have the hardware. It’s easy to dismiss that if you’re not in the US, or you live somewhere that has coverage with another carrier, but Verizon has 140 million customers. For reference, the US population is 318 million. That means HTC, or OnePlus, or any other GSM only manufacturer can’t sell their device to 43% of the population of the US. But you know who can sell an unlocked phone to 43% of that population? Yep, Apple. And with a cheaper phone, that becomes incredibly easy.
Pricing is the next big deal, especially because of how it ties in with Apple’s growing unlocked presence. The iPhone SE costs $399, which is pretty affordable for the top-of-the-line hardware it offers. The HTC One A9 is $500, so it’s actually more expensive than the iPhone, and with worse hardware. I don’t think anyone ever thought we’d see the day that Apple undercut mid-range Android phones with flagship specs, but it’s here. The OnePlus X makes a better comparison, since it beats Apple’s price a bit and comes in at only $249. But you lose a fingerprint scanner, mobile payment options, a flagship camera, etc. It has its own strengths (dual SIM slots, expandable storage) but it loses out when it’s lacking several key LTE bands and, again, lacks support for the largest carrier in the US.
Other phones? The Moto X Pure Edition costs $399, and there’s no fingerprint scanner. The OnePlus 2 barely beats the SE by $50, but you lose the mobile payment system and Verizon support. The Nexus 5X also costs $349 and manages to stay toe-to-toe on Apple’s feature list, but spotty performance makes that a hard recommendation to save just $50. We’ll still have to wait and see if Samsung manages to cram top shelf performance into a sub-$399 package, but if I was betting man, I wouldn’t bet much on that happening.
For many of us, especially the ones keeping up with Android news sites, we’d probably pick Android anyway just because it’s our preferred OS over iOS. But for tons of people, the Android v. iOS decision is made by which one can do more for less, and Apple’s price tag makes a very compelling argument to sway many mid-range customers over to their side of the fence, especially for someone looking for carrier flexibility.
This isn’t to say you should ditch your Android device and go preorder an iPhone SE, and it certainly isn’t doom and gloom for Android, Google, Samsung, HTC, or anyone else. (well, maybe HTC, but that’s entirely unrelated) But it’s very telling that a company known for keeping their prices much higher than the competition managed to take a step back and beat just about everyone else at their own game, and it’s about time someone on the Android side of the fence steps up does the same.
There’s plenty of arguments on the other side of this, too. $399 only gets you 16 GB of storage, and there’s still quite a bit of room at the bottom of the pile against the Moto Gs and Galaxy J1s of the market, although the update situation on some of those cheaper phones leaves a lot to be desired. But with smartphones trending towards unlocked devices that don’t cost $800 out of pocket, Apple looks poised to snatch up the market that an Android OEM should’ve locked up a long time ago.
Come comment on this article: Apple’s iPhone SE chips away at one of Android’s biggest advantages
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