Localytics: iPhone SE sales slow at launch, but demand 'could grow steadily'

The iPhone SE had the lowest adoption in its first weekend of availability of any Apple handset since 2012, according to Localytics, and claimed a mere 0.1 percent of the overall iPhone market after its first few days of availability. Sales of the iPad Pro, however, are on par with earlier iPads.

New iPhone models typically offer new features and technologies, and often introduce a new design such as the larger screen of the iPhone 6 and 6 Plus. But "both the look and features of the new [iPhone SE] device have been done before," Localytics observed, so the iPhone SE has little appeal to early adopters looking for a cutting-edge handset.

Apple is positioning its new phone as an ideal upgrade for users who favor smaller handsets, but the iPhone SE failed to claim any substantial share from the iPhone 5 that it closely resembles. And that indicates those consumers have yet to be convinced to upgrade, Localytics said.

The iPhone SE costs just $160 to build, according to IHS, and is aimed at the lower end of the market with its $399 starting price.

Localytics' data echoes a report from Piper Jaffray analyst Gene Munster, who found that the iPhone SE launch last week didn't generate the point-of-sale interest that earlier models have. Slow sales out of the gate don't necessarily mean the device is doomed, however.

"For the non-early adopters, the demand for the SE could grow steadily as upgrades become available," Localytics noted. "Because the features are largely the same as the previous two years' models, the SE doesn't exactly scream 'Buy me now!' Consumers who want the smaller SE phone may be waiting until their annual upgrade."

Meanwhile, the early sales of the 9.7-inch iPad Pro were closely aligned with those of the iPad Air 2 and original iPad Pro, Localytics said. The new tablet took 0.4 percent of the tablet market during its opening weekend, compared to 0.4 percent for the iPad Air in 2014 and 0.3 percent of the iPad Pro last year.

"The new iPad has been well received, suggesting that there is potential for this model to make a long-term impact on the iPhone tablet market," said Localytics. "A model that is easy to transport, but also provides top-notch performance, could be what tablet users have been looking for."

While Apple remains the dominant mobile hardware vendor in terms of profits, it increasingly faces challenges as both the smartphone and tablet markets slow worldwide. The company saw a 24.8 percent year-over-year decline in its tablet business in the fourth quarter of last year, and iPhone sales may have plateaued. The new iPad Pro is likely to shore up its tablet revenues, and the company will look to give its handset business a lift later this year with the expected launch of a new flagship iPhone.

For more:
- see this Localytics report

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