Despite its higher price of $429 (£419, AU$719), the new iPhone SE is still the cheapest (and smallest) iPhone that Apple sells. The new price also nudges the iPhone SE a bit closer to Apple's iPhone Mini lineup, which starts at $599 (£579, AU$999) for the iPhone 12 Mini and $699 (£679, AU$1,199) for the iPhone 13 Mini.

Apple is bridging the gap between its two smaller iPhones in more ways than just pricing. The 2022 iPhone SE comes with the same chip that powers the iPhone 13, as well as 5G support and other improvements. The launch also follows reports that Apple won't release a new Mini version of the next iPhone in the fall. At the same time, Apple is already rumored to be working on another new iPhone SE, which could launch next year.

These reports, along with Tuesday's announcement, suggest it's the iPhone SE -- not the iPhone Mini -- that's shaping up to be Apple's marquee smaller-size, budget phone in the future.

The iPhone SE is getting a big upgrade, and the iPhone Mini's future is uncertain

Apple doesn't share data on iPhone unit sales by model. But third-party reports have suggested that demand for the iPhone 12 Mini  was weak. Meanwhile, in previous earnings calls Apple has pointed to the 2020 iPhone SE as being a key growth driver. 

Asian financial news outlet Nikkei Asian Review reported in July 2021 that Apple wouldn't release a new version of the iPhone Mini next year because of slow sales. Predictions from well-known Apple analyst Ming-Chi Kuo also didn't mention a new Mini as part of Apple's flagship iPhone lineup, according to MacRumors. 

Following the iPhone 12's launch in 2020, market research firm Counterpoint Research reported that the iPhone 12 Mini accounted for only 5% of Apple's iPhone 12 sales during the first half of January 2021, Reuters reported. The 2020 iPhone SE was also one of the top 10 best-selling phones in 2021, according to a Counterpoint Research report published Tuesday. Though other iPhone models, like the iPhone 12, iPhone 13 and iPhone 11, made the list, the iPhone 12 Mini and iPhone 13 Mini were both absent. 

Meanwhile, Apple cited the iPhone SE as a reason behind the growth of its smartphone business during its fiscal third-quarter earnings call in 2020. CEO Tim Cook said the phone's small size and affordable price made it appealing to those who'd been holding onto their devices for a long period of time. 

The new version Apple announced Tuesday is similar to its predecessor from 2020, but with some key improvements. The new iPhone SE supports 5G -- which may not be crucial today but will be important as carriers continue to develop their networks -- and runs on the same chip powering the iPhone 13. The new model also has longer battery life and an improved camera, according to Apple. 

If the rumors are to be believed, Apple has plans to further improve the iPhone SE as soon as next year. The company could release another iPhone SE model with a larger screen in 2023, according to predictions from the analyst Kuo and Ross Young, CEO of market research firm Display Supply Chain Consultants. MacRumors reported on the findings.

A larger, 5G-enabled iPhone SE would also be a fitting replacement for the iPhone 11, should the analyst predictions turn out to be accurate. Apple's $499 iPhone, which lacks 5G support, sits right in between the new iPhone SE and iPhone 12 Mini in terms of price. If Apple does release a larger iPhone SE in the future, there's a chance that phone could also adopt a more modern design similar to the iPhone 11 or XR. A leak from the Chinese website MyDrivers suggested that Apple might implement a design like this for the SE, according to 9to5Mac. That assertion, however, was in reference to the 2022 iPhone SE and turned out to be false since it still has an iPhone 8-inspired design.

The iPhone SE's advantages and drawbacks

The iPhone SE's biggest edge is its price. That also gives the iPhone SE a clear audience. At $429, the iPhone SE is simply for people who just want an iPhone without spending close to $1,000. Those interested in the iPhone SE probably don't care about having the most advanced camera or an OLED screen. They just want a new phone that's reliable, familiar and won't feel outdated too soon. The addition of Apple's latest processor and 5G will surely help with that.

It's the same reason Apple's $329 iPad is so appealing. Like the iPhone SE, Apple's entry-level iPad has a retro design and lacks many features found on its pricier siblings. But it's a versatile device that offers solid performance for the price. 

You could argue that the iPhone 12 and 13 Mini's audience is also straightforward. Those devices are meant for people who want the latest iPhone but prefer smaller phones, which are difficult to find in 2022. But as I wrote in a previous column, I don't think the price gap between the standard iPhone and the iPhone Mini is significant enough to give it a distinct place in Apple's iPhone lineup. That's especially true now that the new iPhone SE has arrived with improved features. 

That said, there are still some aspects of the 2022 iPhone SE that feel dated and could make it less appealing as a long-term phone. It has only one camera lens, meaning you won't be able to capture broader scenes with a secondary ultrawide lens, as you can with the iPhone 12 and 13 Mini. The front camera has only a 7-megapixel sensor, compared with the 12-megapixel resolution on the iPhone 12 and 13 Mini's selfie cameras. It also doesn't support millimeter wave 5G, the faster flavor of 5G that's available only in very limited areas.

But some people might not be thinking about these factors when purchasing a new phone. Or they may be willing to make those compromises to save hundreds of dollars. Still, features like millimeter wave 5G support and high-resolution cameras could be more important several years down the line, as carriers expand their networks and we continue to dial into video meetings from our phones. 

Only Apple knows what its product pipeline for the rest of 2022 and beyond could look like. But it's certainly telling that rumors about another iPhone SE emerged even before the 2022 model was announced, all while the iPhone Mini's future seems uncertain.