Apple’s iPhone SE is the hot new thing in China… for now

The new entry-level iPhone is sold out on some shopping sites, but analysts say the real competition will come later this year with cheaper 5G phones

Apple

Karen Chiu

Published: 7:05pm, 24 Apr 2020

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This article originally appeared on ABACUS

With the exception of a few upgrades, Apple’s new iPhone SE is largely a throwback to the iPhone 8 from 2017. But that hasn’t stopped it from flying off the shelves in China when it began shipping globally on Friday.

All variants of the entry-level iPhone have sold out on shopping site JD.com, with more than 145,000 units reportedly snapped up on launch day. On Apple’s online store in China, the delivery time is now between one and two weeks, unlike the iPhone 11, which ships immediately.

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This apparent enthusiasm may not last long, though.

Initial sales are largely propped up by discounts and promotions by online vendors, said Ethan Qi, an analyst at Counterpoint Research. Pinduoduo offered a 400 yuan (US$56) coupon for the iPhone SE in a flash sale event earlier this month. And JD.com is promising early buyers a credit up to full price of the phone that can be used to purchase the next generation of iPhones expected in the fall.

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The second-generation iPhone SE sports much of the same design as the retired iPhone 8 it replaces, including a 4.7-inch display, huge bezels and a home button with a built-in fingerprint sensor. But the primary attraction is what’s inside: Apple’s fastest A13 Bionic chip. With a starting price of just 3,299 yuan (US$465) in China, the iPhone SE has the same chip as the far pricier iPhone 11.

The primary goal of the iPhone SE seems to be to attract longtime Apple customers who have been holding out on a new purchase.

“We think many of the potential customers are iPhone 8 and iPhone XR owners, who haven’t bought a new phone in around two or three years,” Qi said. “They will be the first iPhone buyers.”

iPhone users in China tend to keep their phones longer than Android users, according to research firm IDC. Over the past five years, older models like the iPhone 6 and 7 still made up a large portion of Apple shipments. That’s why even though the Californian giant has been trailing Huawei and other domestic manufacturers in shipments, there are still more iPhone users in the country than of any other smartphone brand.

This year, though, it seems like iPhone owners are more enthusiastic about upgrading to a new device. Despite the coronavirus pandemic, over 40% of Chinese Apple users recently surveyed by Strategy Analytics said they want to buy a new phone as planned or sooner. In contrast, only one in four Huawei owners expect to upgrade as scheduled.

The new iPhone SE has a single lens on both the front and back. (Picture: Chris Chang/Abacus)

It helps that the iPhone SE is similar to older models, according to IDC. That way loyal users who haven’t upgraded in a while can easily transition. Those who still prefer fingerprint unlock, for instance, can keep using Touch ID without being forced to switch to Face ID. The iPhone SE is also smaller than its premium siblings, in keeping with older models.

For now, the iPhone SE might have found early adopters. But the real competition will come in the second half of the year, when the impact of the pandemic dissipates and a new batch of entry-level 5G phones with better specs appear, said Qi. The iPhone SE only supports 4G.

He added, “The iPhone SE may have around two months of a golden period.”

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