Asian Tech Press (Mar. 9) -- Apple Inc. released its latest low-cost iPhone SE smartphone, tapping into stronghold of Chinese Android phones.
Chinese phone maker Xiaomi, despite its claimed intention to enter the high-end phone market, is increasingly feeling pressure from Apple in the low-cost phone market, and the stock price has clearly reflected it.
In the last 5 days, around the time Apple released its cheapest iPhone, Xiaomi shares have fallen more than 15% at $1.66 per share.
Apple's first product event of the year officially began at 10 a.m. PT on Tuesday.
As previously expected, the U.S. phone manufacturer unveiled the 5G-enabled third-generation iPhone SE, iPad Air, and the high-end desktop Mac Studio with M1 chip at the event.
Apple also introduced alpine green iPhone 13 Pro and green iPhone 13, but long-rumored the purple iPhone 13 Pro did not appear at this time.
At the event, what drew great attention was the iPhone SE, which Apple relaunched after two years.
The new iPhone SE uses Apple's A15 Bionic chip, also the flagship processor used in the iPhone 13, and supports 5G networks. However, the new phone utilizes Touch ID instead of Face ID to get unlocked, with a single 12-megapixel rear camera and a smaller screen.
However, as a cheap version of the iPhone series, the iPhone SE3's low price makes it "neutered" in terms of features. With no support for mmWave 5G speeds, the new model will be limited to sub-6GHz 5G.
Apple's iPhone SE was first released in 2016 and updated in 2020. The latest upgrade to the iPhone SE starts at $429 (about 2,710 yuan) and is designed to attract more Android users. Nevertheless, Apple's share of the high-end cell phone market may not be in danger of being eroded.
As the first cheap iPhone to support 5G, the industry is widely expected to bring Apple more market share for mid-range phones in China, while room for Chinese Android phone makers will be further squeezed.
The latest iPhone SE, with a price tag of 2,710 yuan, will put enormous pressure on Chinese phone makers including Huawei, Xiaomi, Vivo and Oppo.
In recent years, Apple's smartphone product strategy has begun to seek to cover a wider range of user groups, creating a complete lineup of high-end, mid-range and low-end products.
In 2016 and 2020, Apple launched two generations of the iPhone SE, both positioned in a price range of 3,000 yuan in China, with the intention of capturing the mid-range market for China-made Android phones.
In 2020 and 2021, Apple introduced the iPhone 12mini and iPhone 13mini, respectively, with the flagship phone's starting price dropping to around 5,000 yuan.
Following the release of the new iPhone SE, Apple may not drop the 2020 model but lower the price to $199 (about 1,256 yuan) to further permeate the Android phone market and gradually expand its market share at a lower price, according to some reports.
Apple products dominated all smartphones sold worldwide in 2021, with seven of the top 10 being iPhones and taking the top five, according to data provider Counterpoint.
Counterpoint said this is the best result ever for Apple's iPhones, with the top three models on the list contributing 41% of the company's total sales.
The above chart also shows that in terms of the number of phone models, apart from Apple, Chinese phone maker Xiaomi is the second biggest winner in 2021, with two of its phones in the list.
The research firm's data pointed out that in the fourth quarter of 2021, with the new iPhone 13 series flagship phones released that year, Apple topped in China's smartphone market with a 23% share, an increase of 79% compared to the previous quarter.
Currently, Xiaomi, Oppo, Vivo and other Chinese brands are generally shifting their strategies from low-end to high-end market. Especially after Huawei's withdrawal, the country's high-end market has become the focus of competition for local phone brands.
Since the second half of 2020, Chinese phone manufacturers have increased their local investment at all levels, including products, sales channels and brands, in the hope of occupying the market share left by Huawei, which has been under U.S. sanctions.
Despite their efforts, in China, one of the largest smartphone markets, Huawei's share of the high-end market has mainly given way to Apple, while Xiaomi, Oppo and Vivo, the three major Chinese phone maker, have gained more of the mid- to low-end market.
When Apple really "puts its foot down" and starts to take the path of balance the price/performance ratio, with its brand influence and product experience, it will undoubtedly become a huge impact for China's local smartphone brands.
TWith the cheapest 5G iPhone, Apple has invaded the haven of local Chinese brands, which will surely set off a new round of more intense competition.
(US$1 = 6.3171 yuan)
