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More than half of Canadian iPhone owners still use a 5s or earlier

Even by Apple's standards, which insists on a tick-tock design cycle, the release of the iPhone SE is a strange occurrence. But when you drill down to it, Apple's actions this past week make a lot of sense.

Not only is it advantageous to Apple from a cost perspective, allowing the company to reuse existing manufacturing processes and components from multiple product lines, but the iPhone SE's familiar size is comforting to millions of existing iPhone customers who prefer smaller screens.

In fact, according to IDC Canada, a Toronto-based research firm that covers the mobile industry, over half of Canadian iPhone users are still using the iPhone 5s or earlier. "There is lots of interest in older, more affordable devices," says Krista Collins, IDC Canada's Research Manager for Mobility & Consumer. As recently as Q4 of 2015, the iPhone 5s was one of the best-selling smartphones in the country, Collins explains, citing Canadian consumers' desire to spend as little as possible upfront when purchasing a phone.

Once people commit to an ecosystem, they are less likely to move away from it.

The Canadian smartphone market is shifting, affected by a confluence of factors, including the weak Dollar, pushing handset prices higher, as well as lower urgency for newer products, as a maturing market ensures devices last longer — often longer today, in the time of two-year contracts, than they did when phones were typically paid off over three years.

"The iPhone SE fills a need in the market," Collins continues. "It gets people into the Apple ecosystem," where they are more likely to stay once embedded. Indeed, according to a recent IDC report, Canadians are more likely to stick with iOS once they've purchased an iPhone than Samsung or LG users on Android. "Once people commit to an ecosystem, they are less likely to move away from it," she says.

Size is also a factor in this regard. While Android manufacturers such as Sony have been able to fit larger screens into devices roughly the same size as the iPhone SE, Apple is the only manufacturer actively seeking those customers. Tim Cook, Apple's CEO that many thousands of people specifically asked for an update to the iPhone 5s, and more than 30 million 4-inch iPhones were sold in 2015 alone. While that makes up only 13 percent of the over 230 million iPhones sold in the year, Apple is looking beyond sales: it is looking at the enormous install base of iPhone 4s, 5 and 5s users still managing their days on devices up to five years old.

The iPhone SE's familiar size is comforting to millions of existing iPhone customers who prefer smaller screens.

Thirteen percent of a company's device revenue isn't much — unless that revenue totals hundreds of millions of devices and hundreds of billions of dollars.

In Canada specifically, where smartphones live and die by the subsidies offered by carriers, the iPhone SE's $99 upfront cost is considerably more palatable than the $399 needed for a base level iPhone 6s, with which the SE shares more than a little in common. As we've spoken about before, the weak Canadian Dollar has impacted more than just the price of service, and affordable handsets with the latest features are increasingly rare.

Daniel Bader is a Senior Editor at iMore, offering his Canadian analysis on Apple and its awesome products. In addition to writing and producing, Daniel regularly appears on Canadian networks CBC and CTV as a technology analyst.

17 Comments
  • I might go a bit further and suggest that because Canadians are tired of being gouged by carriers [ yes even though Canadian carriers are supposed to be abiding by new regulations set out by the CRTC, they have found alternate ways of capturing revenue they might have otherwise lost to the new regulations] many are opting for contract free service and either keeping their older phones and porting to new carriers w/o contracts, or buying less expensive phones unlocked and seeking out carriers like Wind.
  • I'm with MTS. Happy with them.
    57.50 a month for unlimited world wide texting, unlimited data nation wide (some terms there though but I'm OK with it), voice mail, 100 day time minutes and unlimited evening and weekends. I use google hangouts for outbound calls on my data.. Free in North America.
    Just got a iPhone 6 Plus two days ago. Love it. It was 229. But I don't mind. Sent from the iMore App
  • I'm with MTS. Happy with them.
    57.50 a month for unlimited world wide texting, unlimited data nation wide (some terms there though but I'm OK with it), voice mail, 100 day time minutes and unlimited evening and weekends. I use google hangouts for outbound calls on my data.. Free in North America.
    Just got a iPhone 6 Plus two days ago. Love it. It was 229. But I don't mind. Sent from the iMore App
  • Sorry to hear that. Lol Sent from the iMore App
  • The fact that in 2 years, Canadians dollars took a dive vs US $ could have a saying in that also. Could someone explain to me why the price of the iPhone is locked with US $ when all part and assembly are from Asia ? Does R&D really count for most of the price ?
  • China is paid in American dollars, not Canadian. Sent from the iMore App
  • and in the last 2 years, US $ gain value over China CNY
    Doesn't it mean that iPhone part are cheaper for Apple to buy ?.
    Canada is a small country and the volume of Market exchange needed to change the value of the dollars is very small compare to the real value of the economy of the country and in the end, iPhone price rose about 20% in two year in Canada and salary did not.
  • Doesn't really matter if it gained...they buy in USD and sell in CAD, therefore the low CAD has a major impact to the price. Sent from the iMore App
  • Or, it could be that Apple followed the 'bigger is better' trend a bit too much, while many of us still want the smaller phone-sized-phone, and is now back-tracking a bit.
  • This! Sent from the iMore App
  • But the iPhone has been dominating in sales since they made the change. I think they kept it in their back pocket the whole time and waited to see if there was still enough of a taste for it. In the meantime they has older phones they were still selling to fill the gap. Sent from the iMore App
  • Yea, I just think it would have been smarter to keep the 4" in the lineup, and add the bigger models. Then they would really have known what was going on. iPhone sales probably would have went up no matter the lineup, so the idea that the sales increase was because of bigger screens, such that they could drop the smaller, IMO, was kind of silly. Also, I don't think this trend of selling older models as the 'budget' devices is a good idea at all! iOS is moving too quickly. The 'budget' models (which Apple keeps saying they have no interest in, yet keeps either producing or keeping older models in to fill) should be the latest tech, but feature limited, not old tech. The problem with old-tech, is that you get a new user into the product line from some competitor, and then iOS updates and they have a bad experience, as the old tech doesn't run it well. Will they stay? Who knows, but it's not a great idea. Another example of Apple now putting profits and marketing tactics over user-experience. (When user experience is the key to their success.)
  • No wonder. Iphone 5s is the benchmark in terms of product design by apple.
    6/6s feels so like not Apple.
    Happy to see 5s in a new avatar. Finally an upgrade for 5s lovers :) Posted via the iMore App for Android
  • The dollar is not weak. If it was weak, the phone would be more affordable in Canada. Basic economics. Sent from the iMore App
  • $1 CDN is worth $0.75 USD. That's weak. Learn to economy. Sent from the iMore App
  • I feel that Canadians are still on the older iPhones is because due to price. Although iPhones are really great phones, I been using iPhones for a while now but they are very pricey. Even compare to Samsung and android phones. I even start to feel that to get the latest and greatest iPhone will be to much for me. Currently using a iPhone 6 which I had since launch day. But to upgrade when the iPhone 7 comes out? I am not sure cause of price like even 6s right now is still pretty high for Canadians
  • Mrs. Meh, are you stupid, or what? You just parroted what I said. The CANADIAN dollar is weak. You should avoid economics 101 and buy hooked on phonics first. Sent from the iMore App