Can iPhone SE, 9.7-Inch iPad Pro Revitalize Sales?

iPhone SE, Smaller iPad Pro Unveiled: Up Close Look

Apple announced the 4-inch iPhone SE and 9.7-inch iPad Pro March 21, iterative updates to existing products that might not have the impact Apple needs to boost sagging sales. The new smartphone adopts the features of the big-screened iPhone 6s, while the recycled tablet does much the same with respect to the iPad Pro.

The first quarter of the calendar year is slower for Apple, which usually updates its smartphone and tablet mix in the fall months. Dropping new products about six months into its update cycle is a clear attempt to improve sales.

Apple believes the new products will pack punch, but others aren't so sure.

During its presentation Monday, Apple said some 30 million people bought 4-inch iPhones during 2015 -- probably the iPhone 5s, which Apple kept in its lineup after the iPhone 6 and 6s reached stores. What's more important than these 30 million customers, however, are those who've refused to update from a smaller iPhone to the larger 6s or 6s Plus.

"There's significant pent-up demand within Apple's base of iPhone owners who want a smaller iPhone with up-to-date specs and newer features," argues Jan Dawson of Jackdaw Research. "The iPhone SE is designed for this group, and should unleash a decent upgrade cycle over the coming months. A few million more sales in the quieter spring and summer months should help Apple close the gap with last year's sales numbers."

Perhaps.

The iPhone SE relies on the diminutive-yet-appealing 5s form factor, but stuffs all Apple's most coveted new features into the chassis. For example, the SE boasts the A9 processor, M9 motion co-processor, 12-megapixel camera with Live Photos, and Touch ID with Apple Pay.

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The price point may help. Apple is selling the iPhone SE with 16GB of storage for $399, and a 32GB version for $499. The entry-level model undercuts the price of the iPhone 6s by $250.

"The $399 pricing suggests Apple really wants to sell this thing in large numbers," Dawson writes, "and the mix of features and pricing compares very favorably with the iPhone 5s, which it replaces in the lineup."

There's no doubt the iPhone SE is a big update for the 4-inch form factor.

At $399, however, the iPhone SE won't find much traction in emerging markets -- which is where all the growth is taking place right now.

The new iPad Pro is a welcome update to Apple's 9.7-inch form factor. It borrows the best features of the 12.9-inch iPad Pro and puts them into a more-portable, yet just-as-powerful package. Apple last updated its 9.7-inch tablet with the iPad Air 2 in October 2014.

The 2016 tablet supports the iPad Pro's most important features, including the Apple Pencil stylus and Smart Keyboard via Smart Connector. It also has an A9X chip, 12-megapixel camera, and stereo speakers.

(Image: Apple)

Pricing takes a jump, however. Where the entry-level iPad Air 2 cost $499, the entry-level iPad Pro starts at $599. Pricing ranges up to $900 for the 256GB variant. Dawson believes this creates a conflict for would-be tablet buyers.

"This means a change in the identity of the iPad line -- the people who will buy an iPad Pro going forward will in some cases be different people, and in many cases will be buying them for different reasons compared with past iPad purchases," Dawson writes.

The iPhone SE and iPad Pro will be available for pre-order March 24, with shipments going out on March 31.