Apple reveals budget phone amid economic angst

Apple took the wraps off its cheapest iPhone ever on Wednesday with the world gripped by the first economic recession since the financial crisis.

The budget-friendly iPhone SE comes with a $399 price tag; that's $50 less than the cheapest Apple model out there - the soon to be retired iPhone 8.

By dropping the price, Apple hopes it can lure away fans of cheaper but feature-rich Android-driven models made by Samsung and Chinese handset makers like Xiaomi.

A few sacrifices come along with the price cut: while the SE will have wireless charging and a high-end camera, it can't connect to next generation 5G wireless technology.

Despite that, Apple is betting a lower-priced model could lock more users into services such as AppleTV+, Apple Music and iCloud.

It's giving free one-year access to AppleTV+ with the purchase of the low-budget phone just like it does with its higher-prices models.

Apple has been pouring cash into subscription services, which are now the source of faster revenue growth as handset sales slow.

It’s hoping to have 600 million paying subscribers by end of this year.

With many of Apple's retail stores closed around the world - online orders for the iPhone SE will go live on Friday - with Apple aiming to deliver devices starting April 24th.

But with the world reeling from a health crisis, it is unclear whether consumers are in the mood or even have the extra cash for a new phone no matter how much Apple drops the price.

Video Transcript

- Apple took the wraps off its cheapest iPhone ever on Wednesday, with the world gripped by the first economic recession since the financial crisis. The budget-friendly iPhone SE comes with a $399 price tag. That's $50 less than the cheapest Apple model out there, the soon to be retired iPhone 8. By dropping the price, Apple hopes it can lure away fans of cheaper but feature-rich Android-driven models made by Samsung and Chinese handset-makers like Xiaomi.

A few sacrifices come along with the price cut. While the SE will have wireless charging and a high-end camera, it can't connect to next generation 5G wireless technology. Despite that, Apple is betting a lower-priced model could lock more users into services such as Apple TV+, Apple Music, and iCloud. It's giving free one-year access to Apple TV+ with the purchase of the low budget phone, just like it does with its higher-priced models.

Apple has been pouring cash into subscription services, which are now the source of faster revenue growth as handset sales slow. It's hoping to have 600 million paying subscribers by the end of this year. With many of Apple's retail stores closed around the world, online orders for the iPhone SE will go live on Friday, with Apple aiming to deliver devices starting April 24. But with the world reeling from a health crisis, it is unclear whether consumers are in the mood or even have the extra cash for a new phone, no matter how much Apple drops the price.