People want big phones. That’s an unquestionable fact. Look at Apple’s iPhone sales for the entire year of 2015, and you’ll have all the proof you need (and if you need more, remember that it was unexpectedly strong sales for Samsung’s original Galaxy Note that helped stoke interest in big phones in the first place).
I myself switched to an iPhone 6 the minute it came out in 2014, and I upgraded to a 6S last year. I haven’t looked back. But I’ve only ever wanted the 4.7-inch versions of both phones—the 5.5-inch Plus series phones are just too big and awkward for me.
And that’s the rationale behind the iPhone SE. It’s a high-end option for people who want a new phone but don’t want to deal with a bigger phone. It’s remarkable primarily because most smartphone manufacturers have completely abandoned smaller high-end phones as they’ve chased bigger screens (Sony’s Xperia Compact series being the most notable exception).
It seems like an obvious idea. Hundreds of millions of people bought smaller iPhones for years (hell, Apple says 30 million people bought the two-year-old iPhone 5S just in 2015) and were presumably happy with them. As well as the larger iPhones have sold, they can't possibly appeal to 100 percent of the people who bought smaller ones for years.
Good as the SE is for iPhone users who want something smaller, it’s also going to have important side effects for Android users. As much as Android fans like to make fun of Apple for adopting ideas from other ecosystems (larger screens; big tablets with attachable keyboards), Apple still sets the pace for a lot of smartphone development. Gold phones? Apple popularized it. Actually decent fingerprint sensors? Apple again. Mandatory encryption of all data in local storage? A conversation started by Apple. Look for Android phones with pressure-sensitive screens to start showing up as soon as viable technology is available. Apple regularly popularizes features even when it's not the first company to use them.
If the iPhone SE is a success (and if the 5S was still doing that well despite its age, the SE almost certainly will be), the same thing is likely to happen. Maybe we’ll get a Galaxy S8 Mini or an LG G6 with a smaller size but the same specs as the original, sold for a still-healthy price premium over the low-end phones that currently dominate the small-screened segment. If a market exists, profit-starved Android OEMs will rush to serve it.
The cost is important, too. At $400 for a 16GB version (and $500 for the 64GB version you should probably actually buy), it still isn’t exactly cheap, but it’s a substantially better value proposition than previous low-end iPhones. Instead of spending $450 on a completely unaltered version of a two-year-old handset, you’re spending $50 less on a brand-new device that supports essentially every important feature in Apple’s ecosystem: Apple Pay, Hey Siri, the M9 coprocessor, and a big boost to CPU and GPU performance. Buying the cheapest iPhone also usually meant that you wouldn’t get new iOS support for as many years as you get with a new iPhone; this is presumably no longer the case with the SE.
I don’t see the iPhone SE driving a massive number of new iPhone sales—in the long run the company is more likely to simply retain existing iPhone 4S, 5, 5C, and 5S users who haven’t upgraded yet. (Apple’s sales figures say lots of users buying their first iPhone were also buying the smaller iPhone, but that probably has as much or more to do with price than it does with size). But it’s an important product release that should ultimately result in better hardware diversity for everyone who wants to buy a phone.
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