The last time Apple unveiled a new four-inch iPhone was September 2013. Back then the Canadian mobile market looked very different. Phones were generally smaller and, though the industry was just transitioning from three-year contracts to two, considerably less expensive. It was also a strange time at Apple itself; the company, selling a then-record 51 million iPhones in the quarter following the iPhone 5s' launch, tried pushing its boundaries with the release of the colorful, plastic iPhone 5c.
In the months following the iPhone 5c's release, with Apple declining to breakout sales, it was left up to analysts and the media circus to consider the implications of Apple refactoring its blockbuster phone for a younger, more cost-conscious demographic. While the iPhone 5c stuck around until the debut of the iPhone 6s last September, its two-year existence had an unclear impact on Apple's product strategy.
From 5s to SE
This year, the iPhone SE rumored to be announced next week will likely replace the iPhone 5s in Apple's lineup. Despite the presence of what is expected to be top-tier specs, like Apple's speedy A9 chip and an improved camera, the iPhone SE shares some things in common with the iPhone 5c. That's especially true in countries, like Canada, whose carriers incentivize sales with subsidies in exchange for long-term service agreements.
Assuming that nothing else changes, the iPhone SE will slot into the same spot held by the iPhone 5s today. But given that such a device, if it does ship with an A9 chip and an updated camera, would have higher specs than the A8-powered iPhone 6, how will Apple present it to consumers?
Traditionally, Apple has been very deliberate with its tiered pricing: a new iPhone debuts, and the older versions dip between $100 and $150. Due to the weak Canadian Dollar, and Apple's associated price hikes alongside the unveiling of the iPhone 6s and iPhone 6s Plus last September, the 16GB iPhone 5s is the only $0 variant on the market. This number is important, because an increasing number of shoppers, eager to minimize upfront expenses when purchasing a new device, wait until a handset goes free before picking it up.
Anticipating the release of the iPhone SE, Canadian carriers have lowered the cost of the 16GB iPhone 6 to that precious $0 mark on a two-year contract. Because the entry-level iPhone 6 costs $769 outright, or unlocked straight from Apple, the carriers are requiring a minimum monthly spend of over $90 to justify the extra subsidy. That's a strategy that has worked in the past on previous iPhone models.
With the iPhone SE on the horizon, it will be interesting to see where Apple prices its least expensive (presumably 16GB) model. The cheapest iPhone 5s is $599, and it's difficult to see its successor costing any less.
If Apple matches the current $450 U.S. price of the iPhone 5s, and continues hedging against weakness in the Canadian economy, the iPhone SE could debut at $625 to $650, which would translate to $125 to $150 on-contract. And because carriers are willing to more heavily subsidize older devices (like the technically more-expensive iPhone 6) than newer ones, we could theoretically see a situation, at least in the short term, where the iPhone SE is pricier than its larger siblings.
That reality may suit Apple nicely, as it brings the four-inch iPhone back into the spotlight, encouraging customers of the iPhone 5 and 5s to finally set aside their aging devices.
I've heard anecdotally that, despite the proliferation of five-inch-plus devices on the Android side, many iPhone owners dread the notion of being forced to purchase a larger device upon the inevitable death of their current model.
Not only does the iPhone SE present iPhone owners with another size choice, it reinforces the idea that Apple is willing to disrupt and upend its own established product lines to present its customers with the choices they want. While this doesn't mean Canadians will finally get the cheap iPhone many want, it raises the floor on the capabilities of all the iPhones on the market, and for Apple, that's priority number one.
How do you think Apple will price the iPhone SE in Canada? Let me know in the comments!
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.
I'm still a little confused though. In Canada do the carriers charge a subsidy fee? I've been off contract and buying phones outright for so long I don't really understand how it works. My understanding (and I could be wrong) is that when you get a phone from the carrier in the US the cost is amortized over the contract length and it's an actual line item on the bill, but this isn't the case for Canadian carriers, and they're just baking the cost into the overall bill pricing (which is why people like me who buy their phones outright don't see that much benefit apart from it being unlocked).
They get you with the cost of the plan. You can haggle to mitigate the price increase and since most people don't bother you'll usually win. Basically they give you the phone (take the S7 Edge for example) for about half the price of buying it outright, so roughly $500 CAD + tax but increase the price of your plan because they change the plans every 6 months or so as some kind of technicality to get you to spend more money. So when you go to get your new phone the plan you're currently on is technically no longer available. My buddy just go the S7 Edge but they wanted to increase his monthly bill by $35. Over the course of 24 months that's an increase of $840 CAD + tax. Add the $500 CAD + tax for the "subsidized by you" phone and it's cheaper to buy it outright. ~TheRealFixxxer
You can fight that though if you are willing to put in a bit of work. If you've been with a particular carrier for a while you can try your luck with customer loyalty. Sometimes they cave just so they don't lose a customer. But it's much easier to just buy outright. My carrier basically admitted they don't have a current plan as good as the one I had back when I first signed up with them 6 years ago. I am holding on to this one for dear life. Sent from the iMore App
I'm just hoping it floods the market even more. The used market is doing well - $225 for a 5s, $450 for a 6...I even found a 128gb 6+ for $550. Bring on the new models. Sent from the iMore App
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