Apple announced the updated 4" iPhone SE with significant upgrades to its hardware which makes it comparable to the 6S in terms of hardware (12MP camera vs. 8MP in 5s, A9 processor (2x faster than legacy 5s model), M9 motion coprocessor (3x faster than legacy 5s model), Apple Pay built in, Touch ID fingerprint security, enhanced LTE bands and Wifi). Pricing starts at US$399 for 16GB version (versus US$450 for iPhone 5s and US$650 for iPhone 6s) and is slightly better vs our expectations of starting price points at US$400-US$500 (legacy 5s now selling for less than US$300 in India as it approaches end of life). While no mention was made of any pricing adjustments for legacy 5S (likely approaching end of life now), we do note Apple's pricing strategy to reduce the starting price point of iPhone SE to US$399 is clearly intended to gain more share in the emerging markets (India and rest of APAC) where phones for less than US$400 comprise 80% of unit sales.
We refer to this as the premiere of "Applewood" (India focused push by Apple to showcase it can price and gain material share).
