This week saw Apple cut its iPhone production by 20 percent for 2021, but it was the iPhone 12 Mini that took the brunt of the declining numbers. The order book falls by approximately 70 percent. Has the iPhone 12 Mini failed given the expectation that the new iPhone handsets will stay around 75 million year on year?
On rough numbers yes, but in a way it might be the most successful failure Apple has seen
The Apple iPhone 12 Mini in the Apple Flagship Store at a product launch event in Sydney, [+]
© 2020 Bloomberg Finance LP
First, the fact that Apple is slipping production of the iPhone 12 Mini is a good sign that it fell short of Cupertino’s expectations. Clearly, there will be an impact on COVID-19 sales, not just to Apple, but across the industry. Apple’s order cut is specifically aimed at the mini.
It’s not scrapping the production of the mini, so there’s clearly a demand for the smaller smartphone with the latest specs, but it’s clear that Apple has overestimated the level of demand. With a launch in September, Apple had trends from summer sales of its smartphones, tablets, and desk-bound computers, but long lead times in an upside-down world may have clouded the problem.
With Apple’s eerie reading of other areas, such as the larger iPhones and the M1-powered Macs, the volume of the iPhone 12 Mini call feels inexplicable.
Perhaps the idea of a ‘small’ iPhone cannot be kept in isolation. The iPhone 12 Mini was not the device that unlocked the demand for a smaller iPhone that would bring the masses to the (online) Apple Stores to meet their demand. That belonged to the second version of the iPhone SE launched in April 2021. With the same power and specifications as the then-current iPhone 11, one of Apple’s geekeratis who was waiting for the small but powerful update jumped to the SE.
Which market remained for the iPhone 12 Mini? The iPhone SE squeezed it out of the ‘cheapest modern iPhone’ space. And above the iPhone 12 Mini was the iPhone 12, with a slightly larger screen, better battery capacity and a more traditional handset size (at least traditionally, going back to the iPhone X). With only $ 100 difference between the Mini and the regular 12, the Mini was pushed down and out.
For a long time, Apple had a very limited portfolio of iPhone devices. At the end of 2020, there were five handsets that were in the ‘new’, along with Countess handsets from previous years. At some point, every wallet will reach saturation point. The iPhone 12 mini seems to be that point.
Apple is a very conservative company. It focuses on doing the basics really well, making hardware and software work together as smoothly as possible, and waits for the very latest technology to mature before throwing a cliché bit of branding on top to give it a special coat of paint that only Apple can sell.
In this sense, the iPhone 12 mini can be seen as Apple’s greatest success. It showed Apple exactly where the edge of the envelope was for small handsets, it reached every customer who wanted this size, and it allows Apple to calibrate the iPhone 13’s orders as the world reaches a normal later this year.
It may be a failure, but it is one of the best failures Apple could have on its books.
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