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Why are small phones not economical for major flagship phone developers? Obviously more expensive phones generate more revenue, but the reduced bill of material

Why are small phones not economical for major flagship phone developers? Obviously more expensive phones generate more revenue, but the reduced bill of materials on smaller phones should allow a better profit margin? Mostly I just want a phone that is comfortable in my hands.

deleted 2y ago
[deleted]
noja 2y ago
Because people expected to have lower prices with smaller phones.
gjsman-1000 2y ago
Because nobody buys them. Apple tried with the iPhone 12 mini, and the iPhone 13 mini. They were only 5% of phones sold globally, and only 3% of phones sold in the US. The desire for small phones is an internet thing, but not backed by the market. Take it as a reality check for how internet opinions can be mostly irrelevant.
- bob1029 2y ago
  At the scale of Apple, is a specific device configuration that 'only' meets the needs of 3% of their market economically unviable? Did they build a whole special factory just for the slightly smaller device?
  - fckgw 2y ago
    Not a whole factory but whole other tooling, so yes? The chassis is different, the screen is different, the mainboard is different, the layout is different, the battery is different, I think the camera was also different. Only thing shared between the other models was the buttons and the lightning port. It's a huge cost for something that sold (relatively) poorly.
    - boxed 2y ago
      Apple has huge margins, it's not a problem unless you think about margins. Making more money is normally good, even if the margin is slightly lower.
      - tonyedgecombe 2y ago
        If the margin is lower then you make less money not more.
        datadrivenangel 2y ago
        If the additional revenue is positive, and the margin on that additional revenue is positive, you've made more money.
        tonyedgecombe 2y ago
        There are two big if’s there which probably won’t be correct for Apple.
        seec 2y ago
        Exactly. But Apple has so many low hanging fruits that anything that doesn't make billions is irrelevant to them. Apple is making way too much money for the good of their customers. If only people would stop mindlessly buying, they would eventually listen but their userbase has become so huge that they are not going to change anytime soon.
        musictubes 2y ago
        Nobody buys Apple products anymore because they’re too popular? Or maybe they’d be more popular if people bought fewer devices? I can’t make any sense out of what you’re saying. What if, and I know this is a crazy thought but what if people aren’t buying Apple products mindlessly? What if they buy them because they like them? Maybe they’d didn’t buy the mini phones because they didn’t like them.
  - quesera 2y ago
    3% can be "small" in the sense of operationally-insignificant/low-ROI, even at Apple's scale, when you consider that they only have a handful of models (currently five) shipping simultaneously. Figure most of those 3% would buy a different iPhone model if their preference was not available (not Android, because even if brand loyalty / ecosystem lock-in wasn't so powerful, the Android small-phone options are not competitive). Then figure that 0.5% (generously!) of lost revenue has to pay for all the custom tooling, parts, manufacturing lines, etc. ... and it all makes an infernal kind of sense. I'm still anachronistically appreciating my iPhone SE (Gen 1) with a 4" IPS display, Touch ID, Lightning connector, and a 3.5mm audio jack. It's great! Except that I'll need to upgrade from iOS 15 at some point. :)
- BuckRogers 2y ago
  > The desire for small phones is an internet thing, but not backed by the market. Take it as a reality check for how internet opinions can be mostly irrelevant. People have said this for years, but the mini phones were never going to be instant day-one hits. It's a self-fulfilling prophecy to launch them during Covid, offer them 2 years, and say no one wants them. Give them a permanent place in the lineup, treating phones like every other very personal device meant for humans. Small, medium, and large. If you do that, and give people time to see exactly why 5.42 screens are superior to 6.1"+ sizes, then I think the numbers will start to change from what we saw with the iPhone 12 mini and iPhone 13 mini that were launched when people were less on the go than in 100 years. And no, I don't think a mini SKU can ever beat out the "cheap and big" midrange device that the average person is going to go for. Those will never be beat because they have perceived value. But I would bet in time it comes close or beats the "big and expensive" iPhone Pro Max option.
Someone 2y ago
> but the reduced bill of materials on smaller phones should allow a better profit margin? Is there a significantly reduced bill of materials? At best, the correlation between size and cost is very small. Most of the costs are in software, manufacturing, etc, not in materials. Also, would there be a better profit margin? I bet customers won’t want to pay the same for a smaller phone, certainly not give that it will have lower battery life (power usage will, at best, go up with screen area, and battery volume will go up faster than phone volume because parts such as CPUs will not be smaller in smaller phones)

deleted 2y ago

[deleted]

noja 2y ago

Because people expected to have lower prices with smaller phones.

gjsman-1000 2y ago

Because nobody buys them. Apple tried with the iPhone 12 mini, and the iPhone 13 mini. They were only 5% of phones sold globally, and only 3% of phones sold in the US. The desire for small phones is an internet thing, but not backed by the market. Take it as a reality check for how internet opinions can be mostly irrelevant.

bob1029 2y ago
At the scale of Apple, is a specific device configuration that 'only' meets the needs of 3% of their market economically unviable? Did they build a whole special factory just for the slightly smaller device?
- fckgw 2y ago
  Not a whole factory but whole other tooling, so yes? The chassis is different, the screen is different, the mainboard is different, the layout is different, the battery is different, I think the camera was also different. Only thing shared between the other models was the buttons and the lightning port. It's a huge cost for something that sold (relatively) poorly.
  - boxed 2y ago
    Apple has huge margins, it's not a problem unless you think about margins. Making more money is normally good, even if the margin is slightly lower.
    - tonyedgecombe 2y ago
      If the margin is lower then you make less money not more.
      - datadrivenangel 2y ago
        If the additional revenue is positive, and the margin on that additional revenue is positive, you've made more money.
        tonyedgecombe 2y ago
        There are two big if’s there which probably won’t be correct for Apple.
        seec 2y ago
        Exactly. But Apple has so many low hanging fruits that anything that doesn't make billions is irrelevant to them. Apple is making way too much money for the good of their customers. If only people would stop mindlessly buying, they would eventually listen but their userbase has become so huge that they are not going to change anytime soon.
        musictubes 2y ago
        Nobody buys Apple products anymore because they’re too popular? Or maybe they’d be more popular if people bought fewer devices? I can’t make any sense out of what you’re saying. What if, and I know this is a crazy thought but what if people aren’t buying Apple products mindlessly? What if they buy them because they like them? Maybe they’d didn’t buy the mini phones because they didn’t like them.
- quesera 2y ago
  3% can be "small" in the sense of operationally-insignificant/low-ROI, even at Apple's scale, when you consider that they only have a handful of models (currently five) shipping simultaneously. Figure most of those 3% would buy a different iPhone model if their preference was not available (not Android, because even if brand loyalty / ecosystem lock-in wasn't so powerful, the Android small-phone options are not competitive). Then figure that 0.5% (generously!) of lost revenue has to pay for all the custom tooling, parts, manufacturing lines, etc. ... and it all makes an infernal kind of sense. I'm still anachronistically appreciating my iPhone SE (Gen 1) with a 4" IPS display, Touch ID, Lightning connector, and a 3.5mm audio jack. It's great! Except that I'll need to upgrade from iOS 15 at some point. :)
BuckRogers 2y ago
> The desire for small phones is an internet thing, but not backed by the market. Take it as a reality check for how internet opinions can be mostly irrelevant. People have said this for years, but the mini phones were never going to be instant day-one hits. It's a self-fulfilling prophecy to launch them during Covid, offer them 2 years, and say no one wants them. Give them a permanent place in the lineup, treating phones like every other very personal device meant for humans. Small, medium, and large. If you do that, and give people time to see exactly why 5.42 screens are superior to 6.1"+ sizes, then I think the numbers will start to change from what we saw with the iPhone 12 mini and iPhone 13 mini that were launched when people were less on the go than in 100 years. And no, I don't think a mini SKU can ever beat out the "cheap and big" midrange device that the average person is going to go for. Those will never be beat because they have perceived value. But I would bet in time it comes close or beats the "big and expensive" iPhone Pro Max option.

Someone 2y ago

> but the reduced bill of materials on smaller phones should allow a better profit margin? Is there a significantly reduced bill of materials? At best, the correlation between size and cost is very small. Most of the costs are in software, manufacturing, etc, not in materials. Also, would there be a better profit margin? I bet customers won’t want to pay the same for a smaller phone, certainly not give that it will have lower battery life (power usage will, at best, go up with screen area, and battery volume will go up faster than phone volume because parts such as CPUs will not be smaller in smaller phones)