Will Apple Keep the Old iPhone SE Around at a Lower Cost?

Apple is rumored to be introducing an upgraded version of the iPhone SE as soon as March 8, the prospective date of the company's first event of 2022. Apple is expected to drop the price of the older model of the ‌iPhone SE', but it will be replaced by the new ‌iPhone SE', which is expected to be priced at $399.

In his most recent Power On newsletter, Mark Gurman suggested that Apple could possibly keep the 2020 model of the phone at a lower price. Apple would be able to capture market share in places like Africa, India, and South America, where people prefer lower-cost devices.

Apple has never had a sub-$200 iPhone before, with the entry-level iPhone SE positioned as the cheapest one to date.

Bill-of-material estimates from two years ago pegged the hardware cost of the iPhone SE at around $200, meaning a $199 price tag would be a money-loser. But time and economies of scale have probably made that cost much lower by now. Would the cost be low enough for Apple to earn its typical profit margins? No, but the chance to sell services and other products to big new markets could make up for that.

Most of Apple's focus is on its flagship devices, with Apple never seriously targeting the low-end smartphone market, but Apple is known for keeping older iPhones around and offering them at more affordable price points when introducing new devices. The price of the iPhone 12 was dropped by Apple. The most affordable Apple device is the ‌iPhone SE&x200C;, and it is still available for purchase.

Gurman argues that if Apple keeps the old $199 price point, it could see notable sales in developing markets and create long-term services revenue.

The iPod touch has been out of date for several years, and a device like this would allow Apple to replace it. The iPod touch is still using the A10 Fusion chip. If you're looking for a replacement for the 32GB iPod touch, the $199 ‌iPhone SE' would be a good choice.

Gurman has confirmed that there is no sign that Apple plans to keep the older model of the phone as a cheaper alternative. Either way, Apple is going to bring us a new version of its flagship device that will feature chip upgrades and 5G.

According to an Apple analyst, the cheapest 5G iPhone to date will be in the year 2022, bringing faster connections to millions of people at an affordable price point.