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People love small phones, so how come no one’s buying them?

The iPhone SE hold 24% marketshare in the small phones market

Sammy Williams/Unsplash

Earlier this week, Bloomberg’s Mark Gurman said in his newsletter that Apple is gearing up to launch a new version of the diminutive iPhone SE, this time with 5G connectivity to bring it up to speed with the latest handsets on the market.

There was great excitement in our newsroom because we love compact phones, and don’t hear about many compact phones every year. That also got us thinking: why don’t we see more compact phones these days?

The iPhone SE is the top dog of the compact smartphone market

Shrinking needs for small phones

There are many reasons to love smaller phones: they fit in your pocket or purse without a fuss, and it’s easier to operate them with one hand. But the market doesn’t think that’s enough to keep buying them.

There are some strong reasons behind the shrinking sales of phones with screens 6-inches and under. Research firm Counterpoint said that the market for such devices has reduced from 81% in 2018 to just under 10% in 2021.

Maurice Klaehne, a senior research analyst a the firm, said the rise of battery-intensive tech is one of the reasons why the demand for small phones has plummeted: 

The market is shrinking as devices nowadays are much more energy demanding. 5G connectivity necessitates larger batteries and thus a larger form factor for smartphones.

He added that as people use their devices for everything from work, to communication, to gaming and entertainment, having a big battery and a large screen makes those tasks easier.

A quick search on GSMArena’s phone tracker tells me companies launched only 87 devices with screens under 6-inches in the last two years and just 30 in the last year. Some of these devices are entry-level phones for folks looking to buy their first or second device in developing markets.

It’s also possible that some of these devices were fashioned into compact form factors only to keep costs and selling prices low, and not necessarily to cater to people who want a small phone.

Nokia C01 Plus is a compact phone that sells under $120

iPhone SE’s special position in the market

Despite dwindling numbers, the iPhone SE holds a special position in the market for a few reasons. Navekendar Singh, a senior research director at IDC, said Apple’s small device does well because of its price point:

A lot of people are looking to buy an Apple device because it’s cool to have an iPhone, and the iPhone SE is a perfect entry point for that. It costs almost half of what regular iPhones are priced at. So that makes it an attractive purchase for young people not willing to spend a lot.

He added that In India, the iPhone 12 and the iPhone SE 2020 performed equally well because of their price points and geek appeal. The SE sells in the country for ₹39,900 ($537) and the iPhone 12 sells for ₹65,900 ($890).

According to Klaehne, the iPhone SE holds 24% percent of the small phone market, and that’s a great feat.

But if we look at the indicators mentioned above, a large part of the iPhone SE’s success is thanks to its price point.  Its more expensive cousins, the iPhone 12 Mini and the iPhone 13 Mini — both priced at $699 on their launch — haven’t sold all that well.

Reviewers across the board complained about the iPhone 12 Mini’s battery life. While the iPhone 13 Mini made some improvements, there’s little to indicate it was a success.

A top-speced small phone? Forget it

We’ve heard rumors about Apple discontinuing the iPhone Mini series many times. While the company did release the iPhone 13 Mini with high-end hardware last year, we might not get a new one in 2022; instead, there’s a chance we’ll see a cheaper middleweight ‘iPhone 14 Max’ model instead of a small phone.

The Asus Zenfone 8 was a rare compact phone with high-end specs in 2021

It seems like most people buying compact phones these days do so because of how they are priced, and not because of their form factor. There simply aren’t enough fans of smaller handsets anymore, and that means these devices could soon become an endangered species.

Published January 12, 2022 - 12:08 pm UTC

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