Smartphone users in China and India are expected to give up their large-screens for Apple’s new 4-inch iPhone, as the company is betting on its small, feature-rich and lower-priced iPhone SE, Reuters reported.
According to the report, Asian rivals such as Huawei Technologies and Xiaomi, which have been mass-producing smartphones to win market share in the mid-range and near-premium sector, may find Apple's plan challenging.
"With the iPhone SE, Apple is choosing to aim at an under-served segment of consumers that prefer small screen smartphones and have been reluctant to upgrade," research firm IHS said in a note.
"Importantly, Apple's competitors have chosen not to target the premium compact smartphone market," IHS added.
Analysts said that if Apple's smaller phone can match up in features with their smartphones, users may be more willing to give up their larger screens.
"This will appeal to more people who otherwise couldn't afford their flagship phone. This will make the market more competitive at that price point as Apple is preparing to take more share," Anshul Gupta, research director at Gartner, said.
Analysts added that with the price and features of the iPhone SE, Apple will be competing directly with phones made by companies such as One Plus, Oppo and Xiaomi.
"Apple iPhone SE will target feature phone upgraders, first-time smartphone buyers and prepaid consumers in Asia who cannot afford, or are not familiar with, bigger-screen smartphones," Neil Mawston, an analyst at Strategy Analytics, said.
Greg Joswiak, Apple vice president of iPhone Product Marketing, singled out China as a target market during the product launch in Cupertino, California, on Monday, March 21, saying that for first-time smartphone buyers, the 4-inch displays like that on the iPhone SE were still popular.
Joswiak argued that a phone with a 4-inch screen, just like the iPhone SE, is what Chinese buyers tend to start off with.
Apple, which expects iPhone sales to diminish, sees China, Apple's second-biggest market, and India, one of the fastest-growing major markets in the world, as key market for the company.
Apple's iPhone SE may have better chances than the iPhone 5C, launched three years ago, which was affordable but has fewer features than the top phone at that time, according to some analysts in China.
"The Chinese market is not bringing as much growth as previously and is becoming more competitive than ever," Ronan de Renesse, an analyst at research firm Ovum, said.
"Apple must decrease the entry price of new iPhones to sustain growth in China. The iPhone SE offers very high specifications for a low price, which is essential to appeal to Chinese consumers," the analyst added.
The report said that the iPhone SE was made to correct missteps with the iPhone 5C and now comes with the latest processor, fingerprint scanner, Apple Pay and a powerful camera.
As Apple enters the mid-tier smartphone market on second attempt, the iPhone SE is seen to be an improvement on the 5C technology and will challenge Android devices of rivals such as Samsung Electronics and Huawei.