Apple is striking out with the 5G iPhone SE, but ‘services’ and the iPhone 13 are performing well

By Scott Marlette Last updated Apr 4, 2022

Apr 04, 2022, 12:02 PM

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Apple is striking out with the 5G iPhone SE, but 'services' and the iPhone 13 are performing well

Thanks primarily to the insanely popular iPhone 13 family, Apple had a very solid year in the always crowded and competitive mobile industry in 2021, narrowing the gap to arch-rival Samsung while easily keeping Xiaomi, Oppo, and Vivo at bay as the world’s second-largest smartphone vendor.

Of course, with the iPhone 13 quartet released in the late stages of last year and the Galaxy S22 lineup unveiled a little later than originally anticipated, Apple was widely expected to start 2022 off on the right foot as well.

Based on January’s top five best-selling handset lists across key regions like the US, UK, China, and South Korea, that definitely proved to be the case, but it doesn’t mean it’s all going to be smooth sailing from there for the Cupertino-based tech giant through the end of the year.

The iPhone 13 can’t pick up all of the iPhone SE’s slack

If you were skeptical of those incredibly optimistic analyst predictions foreshadowing last month’s third-gen iPhone SE 3 announcement, it turns out a powerful new processor and 5G connectivity cannot entirely make up for an outdated design and limited screen real estate.

More and more insiders and pundits believe the iPhone SE (2022) is not selling anywhere near as well as initially forecasted, with the latest report calling for a reduction of manufacturing orders of around 20 million units.

While that number is not put into full context, Ming-Chi Kuo recently trimmed its 2022 shipment estimation from 25 – 30 million to 15 – 20M. Shipments and builds are two different things, mind you, but even assuming Apple was previously expected to produce 40 million iPhone SE 5G units this year, 20 million represents half of that figure, which is bad. Heck, even 20 out of 60 million would be bad.

Not too big and not too small, the iPhone 13 is the most popular of them all.

Diminutive devices simply have no future (and almost no present) in the smartphone market, which is however good news for three of the four main iPhone 13 models and all four upcoming iPhone 14 variants.

Unfortunately for Apple, the iPhone 13 might not be able to cover more than half of the business lost by the iPhone SE 3, ultimately resulting in a 9 million or so decrease of overall 2022 iPhone production compared to previous estimates.

Get an iPhone 13 at a huge discount from Verizon

We’re talking a 245 to 250 million unit range right now, which would still surpass the 233 million iPhones reportedly manufactured in total in 2021. The problem is 2022 is far from over, and additional cuts could well follow if the iPhone 13 doesn’t retain its appeal quite as well as currently predicted or the iPhone 14 series proves too familiar for any new box-office records.

Music to Tim Cook’s ears

Not that we needed further proof Apple’s services are growing more and more popular (and thus more and more profitable) by the day quarter, but a new survey suggests that’s true for iPhone users from “four different geographies”, which feels pretty significant.

Granted, some services, like Apple Music, Arcade, iCloud, and Fitness, are proving more successful than others, like the “flattish” Apple News platform, and somewhat surprisingly, the company’s Netflix-rivaling TV+, which appears to have “plateaued” in many major markets.

But at the end of the day (and quarter, and year), this division is clearly destined to generate a lot of revenue, especially when you also consider App Store spending (despite a recent “moderation” on the heels of “COVID-related strength”) and continuously growing Apple Pay adoption.

Of course, the biggest spenders are still those in possession of higher-end devices like members of the iPhone 12 and 13 families, which seems like all the more reason for Apple not to feel particularly concerned by the low mainstream popularity of the affordable iPhone SE (2022).

Interestingly, the average age of active iPhones has continued to increase of late in spite of the huge success of Apple’s newest flagships, suggesting “pent up demand” that could well translate into solid sales numbers for the iPhone 14 lineup as well. In short, it’s (almost) all rosy in Cupertino.

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