Around 30 million people bought a 4-inch iPhone in 2015, not far off the combined efforts of the Galaxy S6 and S6 Edge. The market seems to call for smaller handsets, so why has it taken Apple to break a three-year niche market hiatus? And why, only now, are manufacturers clambering to compete in the compact end of the market?
The smartphone market can seem, at times, to be dulled by lethargy. Smartphones are, as with any consumer electronic, designed to sell. Mostly, that means they want to play things safe, avoid risk. The Samsung Galaxy S7 is a good example. The phone's fantastic, it's selling well, an all-round success story. But it brings nothing new to the table. If smartphone manufacturers thought they could keep making S7s until the end of time, they would.
Generally, it takes a lone pioneer to shake things up. HTC gambled on a metal and glass construction, and it found that people loved it. So Apple made its phones out of metal and glass, and so did Samsung, and so did everybody else.
Consumer electronics used to demand more innovation: color televisions, cordless telephones, mobile telephones! These were huge, seismic shifts. But stagnation inevitably creeps in after a period of prosperity, it's impossible to innovate a product forever. And smartphones now seem to have arrived at this point.
But even when there's a seemingly obvious market for a certain device or feature, smartphone manufacturers seem unable to summon the nerve to tread first on new ground or even, as is now the case, return to old ground. The 4-inch iPhone 5c and 5s, released in September, 2013, were the last 4-inch smartphones manufactured in the entire world. There have been none for almost three years. This seems unbelievable, but it's a hangover of another arms race that blinded manufacturers to the possibilities.
The knee-jerk arms race
When Android was still developing and trying to find a chink in Apple's armor, it eventually cracked it: screen size. It turned out that people wanted bigger screens, but Apple only provided 3.5- and 4-inch screens. Android accelerated the growth in screen size, quickly attaining 5.1-inch and larger screens, and the results were palpable. Samsung rose to compete alongside Apple and Android gained a solid footing in the smartphone world. Android offered cheaper hardware and bigger screens: a winning combination.
The problem is that manufacturers acted as though making big devices meant they could no longer make small devices. The Sony Xperia Z Compacts, at 4.6 inches, are still the smallest Android handset available.
Even Apple joined in. The iPhone quickly jumped from 4 inches to 4.7 and 5.5 on the iPhone 6 and 6 Plus, respectively.
Why the iPhone SE now?
Small phones are cheaper to produce. Not only that, but Apple showed its usual exemplary smarts in using what are essentially leftover parts from the iPhone 6s – its processor, most notably – to build into the iPhone SE. This results in not only a cheaper phone to manufacture, but a more powerful device than you'd expect, and it can be sold at an appealing price. The iPhone SE starts at $400. For what remains one of the most powerful devices on the market, this is a very hard deal to argue with.
The time is right for the iPhone SE, because, now that Apple has cut into the screen-size-obsessed market, it is looking to cut into the price-obsessed market, too. The iPhone SE is by no means a budget device, but it is an iPhone for $400. And that has huge appeal. Particularly in China. In fact, Apple is making Xiaomi and Huawei nervous. The iPhone SE reportedly racked up 3.4 million preorders, taking a sizable chunk out of the native manufacturer's sales.
This is what the iPhone SE really represents: Apple's attempt to break into the Chinese and Indian markets, where consumers have largely opted for Android, which produces more affordable handsets.
Now, manufacturers are quickly looking at ways to respond to this sort-of-unexpected turn of events. Rumors are already circulating about a Xiaomi Mi 5 Mini and a Samsung Galaxy S7 Mini, even though Samsung itself said it had killed off the Mini range (a little prematurely, it now seems).
High-end hardware in a compact form could result in smaller and cheaper handsets with the power of their flagship cousins becoming a bit of a 2016 thing.
Do you think we can expect to see more compact devices this year in response to Apple's iPhone SE? Let me know in the comments.