The point people keep missing, is that the SE was never a new phone. The 5 was 4 years old when the SE reused the majority of its design and features. The only substantive change was putting a better camera, radios, and processor into it, and offering it in some new colors. There was never any chance Apple wasn’t going to target a budget market with such a phone. My guess is Apple underestimated how many people who would spend more opted for the SE instead, despite its limitations, specifically for its size, and that ate into their profits from larger phones.
What’s missing from this equation is offering a new smaller state of the art phone, with a new design, and features that are 100% on par with the top of the line phones, even if it doesn’t include all of them. It’ll still be on the low end of the premium pricing, but it gets a bigger return from those willing to spend more and want a smaller phone. Then, they can depreciate it more gradually; and then, like the SE with a processor update, allows them to offer it on the very low end, where it will be more relevant than even the SE because they didn’t start with a 4 year old design and features to begin with. The XR is clearly going to do this for the larger sized phone.
