Despite Apple’s “hit” with the $399 SE, launched in April (see 2004150049), the company’s fiscal Q3 numbers will be "suppressed” due to smartphone weakness in the U.S., said eMarketer Friday, before the company's Thursday earnings report for the quarter ended June 30. Most analysts expect Apple revenue to struggle to match last year's numbers as a result, but services will likely remain a growth area, with people spending more time on their smartphones during the pandemic, said analyst Yoram Wurmser. The analyst expects continued growth in App Store, iCloud and Apple Music revenue. Apple Pay should get a boost from heavier use of mobile pay platforms, he said. EMarketer expects Apple’s share of U.S. smartphone users to remain flat, at a 45.6% share by year-end; Android’s share will be 53.8%, dominating smartphone usage through 2022. U.S. iPad shipments will be “stagnant” at 79.5 million shipments this year for 45.1% of tablet share, from 45.6% last year. Some 53% of Americans, 176.1 million, will use a tablet at least once a month this year, said the research firm. In 2020, Apple will generate $24.83 billion in U.S. e-commerce sales, 10% higher than in 2019. Its 3.5% share, 10% higher than in 2019, is 3.5% of total U.S. e-commerce sales, it said.

Global shipments of smartphone battery cells were $1.5 billion in Q1, up 5% from the same 2019 quarter, reported Strategy Analytics Tuesday. TDK-owned Amperex held the top revenue share at 36.5%, with LG Chem at 28.4% and Samsung SDI at 17.5%. SA expects demand for smartphone battery cells to diminish this year with the slowdown in smartphone shipments amid the pandemic.

Indiana disagrees with "some aspects" of a state Supreme Court ruling that individuals may refuse to unlock their phones for law enforcement to avoid self-incrimination under the Fifth Amendment, a spokesperson for Attorney General Curtis Hill (R) said Wednesday. "We are carefully reviewing it to determine how it will impact future criminal investigations involving electronic devices." The court ruled against the state Tuesday in Katelin Seo v. Indiana (18S-CR-00595), reversing a trial court that held Seo in contempt for refusing to unlock her iPhone. “By unlocking her smartphone, Seo would provide law enforcement with information it does not already know, which the State could then use in its prosecution against her,” wrote Chief Justice Loretta Rush, who seemed to bristle at April 2019 oral argument in which Indiana said individuals may not refuse (see 1904180025). Indiana argued if the compelled act doesn't give the government additional information, the result is a “foregone conclusion” not protected by the Fifth Amendment, but Rush said that exemption doesn’t apply in this case and possibly others involving smartphones due to their “unique ubiquity and capacity." Justices Mark Massa and Geoffrey Slaughter dissented. The case “was mooted when the underlying criminal case was dismissed,” wrote Massa. “And this now-moot case shouldn’t be resolved under our ‘great public interest’ exception because doing so could -- in violation of the core principles of federalism -- leave our Court as the final arbiter of our nation’s fundamental law.” State courts have split on smartphone encryption. The Massachusetts Supreme Judicial Court sided with law enforcement, while the Pennsylvania Supreme Court supported Fifth Amendment protections. The New Jersey Supreme Court held argument on a similar case in January (see 2001210053). The Constitution's individual privacy protection is important, but the document "also recognizes society’s equally important interest in investigating crime and holding criminals responsible," said the Indiana AG spokesperson said. "These legal issues are difficult, and courts all across the county are struggling with how to strike the right balance when modern technology is concerned. Our argument in this case has always been that police followed the proper procedures to obtain a court order and Ms. Seo should have also followed proper court procedures rather than first openly flaunting her contempt for the trial court." The Electronic Frontier Foundation is “gratified by the ruling, and we’re watching for courts in New Jersey, Oregon and elsewhere to continue the trend of protecting against compelled decryption,” blogged Senior Staff Attorney Andrew Crocker.

CTIA and major carriers said the FCC should allow a mobile operating system-based approach on vertical location requirements. CTIA, AT&T, Verizon and T-Mobile representatives spoke with aides to Commissioners Brendan Carr and Geoffrey Starks, said a filing Thursday in docket 07-114: “Adopting a nationwide approach that recognizes the current capabilities of mobile OS-based solutions can yield 40% of 9-1-1 calls producing ± 3 meter z-axis location information by April 2021, while network-dependent solutions in contrast will likely yield only 2%.”

U.S. importers sourced 11.93 million smartphones from all countries in April, according to Census Bureau data accessed Wednesday through the International Trade Commission’s DataWeb tool. That was a 4.9% increase from March but a 21.3% decline from April 2019. Shipments from China, the world’s largest smartphone producer, were 9.06 million handsets in April, up 26.6% from March, but down 20.7% from the same 2019 month. China was 76% of all April smartphone imports to the U.S., compared with 62.9% in March and 75.4% a year earlier. Two months earlier, COVID-19 factory shutdowns sent February Chinese smartphone imports tumbling to their lowest monthly volume since customs began tracking the smartphone category in 2007 (see 2004060042).

Apple’s iPhone 11, starting at $699, surpassed the iPhone XR ($599) in global shipments in Q1, said Omdia Tuesday (login required). Apple shipped 19.5 million iPhone 11s, outpacing the iPhone XR a year ago by nearly 6 million units, it said. The iPhone 11 has two cameras, a “major upgrade” from the single-lens XR, that’s “extremely appealing” to consumers, said analyst Jusy Hong. Samsung was second with the Galaxy A51, shipping 6.8 million units. Xiaomi took third and fourth with Redmi Note 8 (6.6 million) and Redmi Note 8 Pro (6.1 million units). The three companies had all top 10 models. Among 5G smartphones, Samsung led global shipments with 3.5 million for the S20+ 5G, and came in fourth and fifth with the S20 5G (2.9 million) and S20 Ultra 5G (2.7 million). Huawei finished second and third in 5G shipments. Annual smartphone shipments will shrink this year due to the COVID-19 pandemic, slowing the pace of 5G expansion, said Omdia. An exception is China where the smartphone market has been “recovering rapidly” since March.

T-Mobile begins selling its cheapest 5G phone Tuesday for up to half off with a trade-in or added line, it said Monday. Price is $699. The Android smartphone operates on T-Mobile's 600 MHz network and is ready to go on 2.5 GHz spectrum as those markets ramp up, said the company: The OnePlus 8 has a 6.5-inch Full HD Plus display, a 4,300 mAh battery, triple camera and charges halfway in 22 minutes.

The latest iPhone series models -- 11, 11 Pro and Pro Max -- made up 66% of U.S. iPhone sales in Q1, reported Consumer Intelligence Research Partners Wednesday. The oldest and lowest-priced (prior to the launch of the $399 SE last week) iPhone 8 and 8 Plus had 13% share in the quarter, which CIRP called “weaker” than the comparable phones in previous purchase cycles. IPhone owners are keeping their phones longer, said analyst Mike Levin: 28% of buyers kept their previous iPhone for three years or more vs. 12% three years ago. A high-single-digit percentage of iPhone buyers upgrade their phones each year, he said. Overall, consumers increasingly buy the newest, more expensive phones, but they’re keeping the phones “for a much longer time," well past the typical two years from a few years ago, said Levin. That slows the upgrade market and reduces unit demand in a saturated market, he said. Findings were based on a survey of 500 U.S. iPhone purchasers January-March.

Apple’s 4.7-inch iPhone SE that goes on preorder Friday creates an “interesting dynamic” in the smartphone market where it will compete with many midrange Android devices, Gartner's Tuong Nguyen emailed Thursday. The $399 handset “makes a lot of sense,” Nguyen said, when COVID-19’s impact is weighing on consumers. A midrange phone isn’t a new idea -- Samsung has gained leading market share with a broad portfolio -- but “it’s especially relevant for a high-end brand” to offer a value model now, said the analyst. Smartphone makers "don’t necessarily need a device with ALL the bells and whistles,” he said, but they should be “more strategic about the features that appeal most or are most valuable" to their target audience. For the SE, those features are Apple’s latest processor, wireless charging and access to Apple TV for a year. Gartner forecast last month smartphone shipments would fall 2.3% this year in a best-case scenario; worst case is a 7-8% drop-off.

Apple dropped under $400 for its latest iPhone introduction Wednesday, a $399 model (64 GB) that replaces the iPhone 8 in the company’s smartphone lineup. The most affordable phone in the Apple portfolio, available for preorder Friday, comes when customers can expect little hand-holding while upgrading phones. Apple stores are temporarily closed during the COVID-19 pandemic. Best Buy, Apple’s largest authorized service provider, is selling product online, with stores providing only curbside pickup and no in-store sales assistance. Verizon's website urges customers to shop online and go to stores only for “appointment-only critical technical support.” The Verge called the latest SE “essentially an iPhone 8 with a better camera and processor." The 4.7-inch SE -- available in black, white and red bodies -- has the A13 Bionic chip that’s in the flagship iPhone 11 and 11 Pro models, said Apple. The Retina HD display supports Dolby Vision and HDR10 playback, and the phone has a home button like on previous-generation iPhones with a steel ring to detect fingerprints for Touch ID. The SE has a single-camera design with a 12-megapixel f/1.8 aperture lens and 4K video support; the selfie camera is 7 megapixels. Buyers get a free year of Apple TV Plus.