Is Apple's 'Budget' iPhone's Price Increase Justified?

Apple’s first iPhone SE was a huge hit, so when they decided to wait another four years to release a successor, it left the community scratching their hands. Thankfully, the wait for the SE 3 wasn't as long, with the new iPhone SE released just two years later with a bunch of new features, and a $30 price increase.

Some may criticise Apple for the price hike, or consider the cheapest brand new iPhone to be less of a bargain than previously. In reality, it's the complete opposite. In the new iPhone SE, you get a lot more than $30's worth of value.

Features

The A15 Bionic CPU and the addition of 5G connection are the two major new features in the iPhone SE (2022), which were announced during Apple's Peek Performance spring event. 

It has the same chip as the iPhone 13, which starts at £570 if you buy from reboxed. It has a 16-core Neural Engine, a six-core Central Processor Unit (CPU), and a four-core Graphics Processing Unit (GPU). All of this translates to increased speed, strength, multitasking ability, and, most importantly, longevity.

The A15 Bionic also provides more computational photography functions to the camera, making it more entertaining to use and potentially extending battery life. 

The impact of 5G

Some would argue that the feature upgrade is minimal and not worth the price increase, rather placing all the blame on the 5G. Price increases for 5G phones are common - we’ve seen it before in the iPhone 11 to iPhone 12 jump. Estimates from researchers show that 5G added $34 to the bill of materials compared to the 4G-only iPhone 11. It’s said to be the most expensive component in Apple’s iPhone 12 lineup.

Budget Iphone SE

So when looking at the iPhone SE price increase, we can assume that $30 is the premium Apple has to pay to put 5G in the devices and it’s as if Apple is passing the additional cost directly to customers.

Unfortunately, it’s not like Apple has a lot of choices when it comes to 5G modems. Supplier, Qualcomm is the only real option around, and everyone knows it.

Longevity

Longevity is a big benefit of the new 5G modem. Having 5G as an option means you might not have to upgrade your phone as soon as a phone without it.

Longevity in the iPhone SE also applies to software. It has the latest iOS 15 built-in, and just like more expensive models, you can expect four to five years of software support. Apple didn’t provide a specific time frame, only stating that it was be supported for “years to come”, but given that the 2016 first-generation iPhone SE runs iOS 15, the new model should be up to date in 2025 and beyond.

Design

The design of the new iPhone SE is nothing new. It’s based on the iPhone 8 and even shares the same 4.7-inch Retina HD screen. The only noticeable update from the iPhone 8 design is the Touch ID fingerprint sensor. 

It seems this older design is a big hit amongst Apple fans with the iPhone SE (2020) holding position as Apple’s second bestseller behind the iPhone 11 - so it makes sense that they’d bring back the successful design.

This also means Apple didn’t have to spend on development costs, which begs the question of where these development savings have gone and why there’s the price increase. Many will argue that it’s in the processor and modem, but are these improvements enough?

Economic factors

There are other entirely different reasons why Apple’s increased the price this year, including the semiconductor shortage impacting various components like rising inflation or supply chain issues.

Or Apple may have simply noticed that buyers were unfazed by the $30 price rise between the iPhone 12 and iPhone 13 and thought that it could easily charge $30 more for the SE as well.

However, the facts remain: historically, adding 5G to an iPhone has been a substantial cost factor for Apple, and 5G is the single most significant difference between the 2020 and 2022 iPhone SE models.

The silver lining is that Apple might move away from Qualcomm’s modems and create its won, meaning the price could drop again in the future. What will be interesting to watch is if Apple does in fact reduce prices to reflect cost or bag the extra $30 for themselves.

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