Wednesday out a smaller
iPhone valued at $399, cutting the starting price for the company's smartphone
line in a move to broaden its appeal to budget-conscious clients as the
coronavirus hobbles the worldwide economy.
The lower-cost model could
also appeal more customers to Apple services, a growing driver of income.
Shares of Apple fell 1.1%, less than the 2.8% decline of the S&P 500 index.
The iPhone SE, obtainable
April 24, is the second generation of a earlier value model. It will start at
$50 less than what was formerly the cheapest iPhone available, the $449 iPhone
8, which will be retired. The SE comes with a 4.7-inch display and the similar
processor chip as Apple's most advanced mobile, the 11 Pro. The SE lacks 5G
ability and Apple's facial recognition system to unlock the device, instead
relying on a fingerprint sensor alike to older models.
The statement comes as the
United States and much of the world is reeling from the novel coronavirus,
although U.S. political leaders have started to talk about ending stay-at-home
orders and resuming the economy, hoping record deaths and falling
hospitalizations represent a peak.
Every earlier iPhone has
been revealed in a polished presentation in front of followers, but large
events remain banned in Apple's home base of Santa Clara County, California,
where community officials ordered the first lockdowns in the United States to
slow the spread of the novel coronavirus.
Apple's inexpensive phone
reflects the coronavirus-driven economic downturn and job loss.
The economy phone enters a
cut-throat market for value phones, particularly in China, where Apple derives
about 17% of sales. While the new iPhone adds features such as wireless
charging and a high-end camera, it lacks connectivity for 5G, the next
generation of phone data networks. In China, rivals such as Xiaomi Corp
previous month publicized models with 5G features starting at about $425.
With wavering hardware
sales, Apple has been capitalizing in subscription services such as its Apple
TV+ streaming television service, Apple Music and iCloud. The fresh SE will
come bundled with a one free year of the streaming television service, similar
to Apple's flagship devices out last fall.
The company also set out a
goal to range 600 million paid subscribers by the end of calendar 2020.
The coronavirus has shaped a
volatile start to the year. Sales in China, the primary nation hit by the
virus, plunged, then rebounded as the country began to reopen. Sales of 500,000
phones in February rose to 2.5 million phones in March, allowing to government
sales data there.
Apple will begin marketing
the new model online while its stores around the world are closed, except those
within its greater China sales region. Apple will start taking orders for the
phone on its website on Friday, with distribution of devices expected to start
April 24.
Apple gets about 31% of its
sales from its stylish stores and website, with 69% coming from partners such
as mobile carriers and other shops. Apple said partners would decide whether to
sell the phones in their physical stores. Many of Apple's resellers are trying
to guide clients to online sales. Major partners such as Best Buy Inc have
compact their hours, and AT&T Inc has closed about 40% of its U.S. retail
stores.