Apple just played a move that not many players in the smartphone industry can! Apple, the company that launched the $1000 prosumer smartphone is now competing in the sub-$500 smartphone market. The problem with this move by Apple is that the consumer tech giant has made a move into an arena previously dominated by android manufacturers that had cheaper offerings with their less valuable brands and subpar specifications. These Android OEM’s just cannot compete with a tech brand like Apple which isn’t bringing a slouch to the game as the new SE sports the A13 processor, decent battery life, guaranteed software updates, Apple support as well as access to the Apple Ecosystem. This here is actually Apple’s bargain with the SE. With Apple slowly switching to becoming a services company, the tech company would be adopting a model more closely resembling Amazon’s. Recently Apple has posted strong earnings from the services division of the company showing that customers are willing to pay for Apple’s streaming services - Apple Music, Apple Arcade, Apple TV+, Apple News+ and more! With so many services brining in profits, Apple would not just be interested in getting customers of their prosumer products thus granting them access to Apple’s services, but Apple could also be willing to open the floodgates to an entire new set of customers who prior to the SE might never have had the option of subscribing to the new services. With this new portion of the market now granted access to a free trial of Apple’s services, Apple stands to gain more services customers than ever before if she can keep them hooked with good enough arcade games, better Apple Music features, and more interesting shows on TV+. Its a cheaper portal into Apple’s services…potentially fueling revenue from the Apple’s profitable services division

September 21, 2023