NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, September 5, 2019

By Lauly Li, Cheng Ting-Fang, Hideaki Ryugen and Kim Jaewon

With its share of the smartphone market slipping, Apple plans to launch a lower-cost iPhone next spring to win customers in emerging markets and retake ground in China lost to Huawei Technologies and other rivals, sources said.

The new model would be Apple’s first low-cost smartphone since the launch of the iPhone SE in 2016, which started at $399. Though the name and price of the new model hasn’t been decided, it is viewed as the latest generation of the iPhone SE.

The decision to revive the lower cost model comes amid a rough patch for the iPhone. Apple reported its first-ever decline in iPhone shipments for last year, and this summer it lost the title of No. 2 smartphone maker to Huawei. The U.S. company also has suffered two straight quarters of shipment and market share drops this year, according to IDC data. The global smartphone industry overall also faces its third consecutive annual decline in 2019, according to IDC projections.

Blame for the iPhone slump lies in part with the intensifying Washington-Beijing trade war that has weighed on consumer sentiment in China, the Cupertino, Calif., company’s third-largest market.

Photo courtesy of rawpixel.