You are using an older browser version. Please use a supported version for the best MSN experience.

Apple's Shady Surprise In Your New iPhone

Forbes logo Forbes 27-01-2016 Ewan Spence, Contributor

Following on from the info dump at the weekend around the newest iPhone, Marc Gurman has discussed more details around the iPhone 5SE, and it makes for an interesting case of the management of perceptions, especially around the price of a ‘free’ iPhone.

The iPhone 5SE is going to be announced in March with a subsequent release in April (assuming Taniyama Shimura). It will take the place of the iPhone 5S at the bottom of Apple’s iPhone portfolio, and for many it will be mistakenly seen as a replacement for the critically-misunderstood iPhone 5C - instead of being an ‘enhanced’ iPhone 5S as the naming suggests.

Apple iPod Touch 6th Generation, 2015 (image: Ewan Spence): Apple iPod Touch 6th Generation, could the iPhone 5SE be a similar design (image: Ewan Spence)© Provided by Forbes Apple iPod Touch 6th Generation, could the iPhone 5SE be a similar design (image: Ewan Spence) iPhone 5C (image: Apple.com)© Provided by Forbes iPhone 5C (image: Apple.com)

But there is one area where the iPhone 5SE does mimic the iPhone 5C, and that is in memory size. Gurman’s latest post suggests that the base model for the iPhone 5SE will be a paltry 16 GB. Which, quite frankly, is ludicrously low for regular users.

Consider the iPhone 5C, which at the end of its life-cycle shipped with just 8 GB of storage and an OS that demanded just over 5 GB of space. The 5C was a good phone, but a poor smartphone once you added on a few albums, shot some video, and added information to the built-in apps.

The iPhone 5SE 16GB matches this principle. iOS 9.x will take up a significant slice of storage, and the demands on internal storage have increased since the launch of the 5C. Photos are larger, video is shot at higher resolution, the suggested size of application bundles has been increased from a maximum of 2GB to 4GB, and everything is bigger. For me, the iPhone 5SE with 16GB of storage is a compromised device that will offer a limited iOS experience.

This argument can be easily countered by highlighting two areas of Apple’s empire. The first is the knee-jerk response of ‘use the cloud.’ Data can be streamed to a smartphone as required, Music does not need to be kept on your smartphone, and you can upload all your pictures and video to your iCloud account when they are taken. You did want to maintain an internet connection at every point of the day with a small battery, yes? And you have enough bandwidth and data on your mobile connection to not worry about going over any limit, yes? Good.

The cloud is an idyllic answer that has many real world limitations. It requires an ongoing commitment to data charges and subscription services, which will not always match the buying power of the demographic the iPhone 5SE will target. Local storage should still be a priority.

Next: It’s all about making more margin on higher priced iPhones…

Which is where the second answer comes in, and this is where I think Apple has made a smart business play. The iPhone 5SE is available with a second storage option of 64GB. That’s more than enough for efficient and sensible operation of an iOS 9 device. It’s also, going on previous pricing, going to cost $100 more.

No doubt Apple will focus on the lowest price possible for the iPhone 5SE, maybe even going so far as to push for ‘free on a 24 month contract’ and let the subsidy cover the entire cost of the device. Apple (and the wireless carriers) would know that most people will be scared into going for 64GB of storage and adding $100 to the price, but the ability to associate the word ‘free’ with ‘new iPhone’ is a powerful marketing angle.

iPhone 5C (image: Apple.com)© Provided by Forbes iPhone 5C (image: Apple.com)

This is a play that Apple has made before with the current batch of 16GB models in the iPhone 6 and 6S family, but it felt sneaky and underhand then, just as it feels it now. If Apple was truly customer-focused the base model would be 32GB, offering enough room for normal operation and a decent amount of local storage. But that doesn’t offer as much of a differential in perception that 16GB to 64GB offers.

Perhaps this will be the model where Apple moves up to join the Android manufacturers who respect their users and start at 32GB of storage. I’d like to think that, but I think the option to up-sell to a higher priced model of the ‘budget’ iPhone will prove irresistible.


More From Forbes

image beaconimage beaconimage beacon