Does Apple chief Tim Cook know what time it is?
Perhaps not, since he’s peddling watchbands.
That could easily be the take-away from the company’s product conference on Monday — a new iPhone that’s $50 less than its predecessor and a $50 cut in the starting price for an Apple Watch, with more wristband options.
The company debuted the 4-inch iPhone SE — priced at $399 — that packs all the power of the larger iPhone 6S into a smaller body the same size as the older iPhone 5S. That legacy model has been priced at $449 since its introduction in 2013.
That makes the new SE what Apple called “the most powerful 4-inch smartphone ever.”
More interesting to analyst Walter Piecyk, though, was Apple’s introducing “the clearly better SE at a price $50 lower than what the 5S was selling for yesterday.”
Piecyk, who covers Apple for BTIG, said the company has historically started its new and improved products at the same price as the legacy products they replaced — then lowered prices on those legacy products.
But the analyst thought that Apple, given its incredible seven-year run with 4-inch phones before introducing the larger iPhone 6 in 2014, could benefit from its pricing-strategy departure.
“They haven’t delivered a new 4-incher in two years,” Piecyk said, “so maybe they see latent demand for a smaller phone that’s capable of delivering some real upside in the June quarter.”
The price cut on the Apple Watch also departed from company practice, the analyst added, in that it occurred without an updated version of the product coming out to hold the higher price point.
Abhey Lamba of Mizuho Securities was equally surprised by the price cuts but attributed them to Apple’s desire to be “more competitive in mid-tier.”
Piper Jaffray’s Gene Munster also admitted the iPhone SE will retail 11 percent lower than his anticipated price of $450. But he noted the $399 price tag should make the device “more accessible to consumers in emerging markets” — markets certain to be of increasing importance to Apple, like China.
As for the products themselves, Munster called the launch “incremental,” especially for such items as new Apple Watch bands.