Hey.

Very often I hear about all kinds of wishes associated with electronics, and personal, subjective experience is presented as the aspirations of millions. The reasoning here is always the same: if I need such a device, then surely there are millions of people like me all over the world, or even a billion. For some reason, specifically in this case, the awareness of oneself as a special, unique and inimitable person fails, and one’s own desires are transferred to the whole world. This is exactly what I call information noise, which can be safely ignored, nothing sensible will come of trying to follow it. A classic example of an untapped market niche can be considered compact smartphones with a small body size and, accordingly, a screen. If you believe for a moment all those who advocate such a form factor for fairly small devices, then their market share should be noticeable. But all experiments with the release of compact smartphones are not carried out from a good life, companies hit them when things are not the best way and you need to somehow expand the model range, go beyond the usual trends. Sony followed this path when it launched the Compact series, but then safely abandoned it. At the moment, something similar is being done by Apple, the company has two compact smartphones – the iPhone SE 2020, and the iPhone 12 Mini.

Morgan Stanley noted in a note to customers the other day that Apple is cutting production of the iPhone 12 Mini, as the model is not in demand in the market. In the US, for example, this model among the entire iPhone 12 family took only 6% of sales in 2020, and the demand for it is even lower at the moment. I was curious how the iPhone 12 mini behaves in Russian sales, how much this model is in demand at a price of 70 thousand rubles. And this is where the December 2020 sales data comes to the rescue, it turns out that this new product from Apple was not even included in the top ten best-selling smartphones. It often happens, but perhaps this device has overtaken the iPhone SE in sales? This also did not happen, the model turned out to be an outsider of the market in almost all dimensions, it is not included in the top ten sold even among Apple’s own line. The reason for such modest results is to be found in the price of this device, it is transcendental for its modest size and equally modest capabilities.

But let’s leave the iPhone 12 mini alone and think about why any of these models are doomed to failure in the modern market, which does not allow the popularity of compacts to take off. The answer must be sought in how smartphones are developing, the key factor for them was the growth of the screen diagonal year-on-year. Even the emergence of flexible screens is exactly the same tendency to provide a larger screen in a compact body, bypassing the limitations of the conventional design. Exactly to the same trend should be attributed the disappearance of the frames, the protruding ratio of the screen area to the surface of the phone, for many companies this is already almost a hundred percent. The development of this trend has led to the emergence of many technologies, for example, manufacturers have learned to hide front-facing cameras in the screen or even under the screen, abandoned the earpiece speakers or made them invisible. For a decade, the marketing of every manufacturer on the planet has worked to convince the buyer that the increase in screen diagonal is not only good, but also explains why the prices of devices are rising. Yesterday you were sold a smartphone with a screen diagonal of 5 inches, today it is already 5.5, 6, 6.5 or almost 7 inches!

Everything new frightens people, and, of course, voices are heard that this race is going nowhere, and the small screen diagonal is comfortable, so there is no need to increase the diagonal. Moreover, the saying is often heard that a small diagonal is good because you can put weaker hardware, make such a device affordable. And you know what? Some manufacturers believed in this and tried to make such smartphones for calls, and all other functions in them faded into the background. They had everything you could possibly need – a camera, a browser, the ability to install applications, and further down the list. But a simple enough chipset, a small battery (you only need to call!). The latest models include the Samsung Galaxy A41.

The model turned out to be a niche one, which, however, was understandable from the very beginning. But using her example, it is good to explain what was happening in stores, where customers came and in words wanted to buy a compact smartphone.

As a rule, you could see several A-series models from Samsung on the store shelf. One of the most popular smartphones in terms of price / quality ratio is the Galaxy A51 or the younger A31. Against their background, you can choose the A41 only because of its size, there can be no other reason here. And here the buyers were divided into those who chose either A51 or A31. When interviewing buyers, we came across a very interesting pattern, many people asked for a smaller device, since they are not at all familiar with smartphones, they do not understand their differences. They wanted to buy a smaller phone, not because they needed it, but because they thought that a small smartphone should be more affordable. In practice, it turned out that this is just their inventions, which are not confirmed in the store. It is clear that this is not the bulk of buyers, but the very reason for such an initial choice sounds curious.

Let’s go ahead and see how many people bought the same A41 for themselves, for personal use. And here another surprising discovery awaits us, the percentage of purchases of this device for someone else turned out to be the maximum among all models – every second phone was bought not for themselves. Usually, either a child or an elderly relative was named as a user. And here the limitation of the screen size acted as a confirmation of the ideas about what is necessary for these groups of users: I buy a phone for calls, not for games. The ideas themselves are vague and differ greatly from the desires of those who receive these devices. Ask any child how much he wants to get a smartphone with a small screen diagonal, and you will get an unambiguous answer.

Let’s take a look at who is buying the iPhone 12 mini and why. At a price similar to the regular iPhone 12, it is more profitable to buy it, since the screen size is more comfortable. But there are a number of buyers who choose just such a device as their second smartphone. That is, this is the second phone for calls. It would be a delusion to say that a modern phone can only be bought for making calls, people still use all the possibilities, just not so often, and the screen size becomes a limitation, as well as a rather dead battery.

Children of wealthy parents became a noticeable audience for the iPhone 12 mini, for many it was the first iPhone. A kind of symbol of the success of parents who have provided their preschool children with a toy. In the category of iPhone SE buyers, there are a lot of those who buy a device for calls, but there are no those who buy it for children as a symbol of success, since the price does not dispose to such a perception of the device.

Here we got to another realization of what a compact smartphone is for the market. It is a device that is bought by children and the elderly, it is perceived outside the main product lines. And therefore, compact devices are not for everyone. It is interesting that those who want to stand out, do not want to be like everyone else fit perfectly into this description. Such people often choose little-known smartphones, not too widespread, and the choice of compacts as a second device perfectly complements their image.

Is it possible to revive the market for compact smartphones, to make this niche noticeable in sales? In my opinion, in the current framework of market development, this is practically impossible. The only incentive may be a discount on such models, when you will be sold the filling of the flagship model at a price twice as low. But there can be no economy behind such a proposal, hence the reluctance of manufacturers to experiment in this direction.

We started calling such devices as the Galaxy S21 compact models, although its dimensions can be conventionally called small. And the difference with the larger S21 Ultra is not that great.

Everything is learned in comparison, compactness is also a size that is not fixed at all times. For example, the first smartphones were, by modern standards, compact models with screens up to 4 inches, and then off they go, and the devices began to grow in size. In modern conditions, a device with a diagonal of about 6 inches is already perceived as compact, and such it is in the modern coordinate system (and even comparing with the models of the past, we will see that it is more convenient in everything).

Unfortunately, the desire to buy a compact smartphone either stems from ignorance of their own needs, or is inherent in those who want a niche, not very popular device. This means that there is simply no reason for manufacturers to release such models for the mass market, relying on sales. Usually, such experiments are launched when it is necessary to increase sales at any cost, expand the line, achieve some kind of shipments, as was the case with Apple. The company’s partners in Russia are not expanding purchases of the iPhone 12 mini in 2021, but, on the contrary, are reducing them. The story is about the same in the gray market, there is no demand for mini. And this is not a problem of a specific device, a flaw in the very idea that there are a noticeable number of people in the world who want a compact smartphone. Experience shows that buyers for such devices are extremely difficult to find.

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