New 4-inch iPhone expected to add $5.5 billion in sales for Apple

Posted:
in AAPL Investors
Outlook from Apple's supply chain has prompted investment firm RBC Capital Markets to forecast that the anticipated new 4-inch iPhone will net 10 million additional handset sales this year.




With an average selling price of $550, analyst Amit Daryanani believes the so-called "iPhone SE" will add $5.5 billion in sales to Apple's bottom line. That would translate to an additional 23 cents in earnings per share, or 2 percent to its fiscal year 2016.

Daryanani believes his estimates are supported by earnings from Apple supplier Dialog Semiconductor, which told investors it expects its revenues to be up in the single digits for the full year. The integrated circuit maker is believed to derive more than 70 percent of its revenues from Apple, and investors look to its performance to gauge potential iPhone sales.

Dialog's guidance for the March quarter was slightly below expectations, which Daryanani said could signal lower-than-expected iPhone sales. However, he also cautioned that Dialog's March quarter could also be affected simply by changes in channel inventory by Apple.

Regardless, Daryanani believes that Dialog's guidance is further evidence that the March quarter will see iPhone sales bottoming out, potentially setting the stage for iPhone sales to return to the upside of investor expectations in June.

Apple is expected to hold an event the week of March 21 to introduce a new, more powerful 4-inch iPhone, as well as a next-generation 9.7-inch iPad. It's believed that both products will launch very soon after they are announced, potentially starting sales before the conclusion of the current March quarter, though the first full quarter of sales would be June.

RBC Capital Markets has maintained an "outperform" rating for shares of AAPL, with a $130 price target.
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Comments

  • Reply 1 of 57
    saareksaarek Posts: 1,105member
    Our credit card is at the ready. My wife's old iPhone 5c has had better days and she doesn't want a "big" phone like my iPhone 6.

    Huge market out there for those that want the smaller form factor.

    I just hope they don't neuter it with sub 6s specs.
    pmzcalibaconstangdouglas bailey
  • Reply 2 of 57
    nolamacguynolamacguy Posts: 4,758member
    oh nos! this amazing projected growth will just cement their eventual demise on a doomed product line which cannot last forever!
  • Reply 3 of 57
    6Sgoldfish6Sgoldfish Posts: 108member
    Oh gosh. Having read several articles today on the stunning S7 Edge, I feel absolutely agitated by Apple's itsy bitsy nonsense. I've been a long time Apple user, and I sure hope the competition will finally rattle the complacency of what's become an old boy's club (I still cannot unshake the image of Eddy Cue groovin' to Beats 1). Years of following each and every product announcement and WWDC in sweet anticipation, just to be sorely let down by incremental tripe and dizzying trade-offs in lieu of device thinness. Please, snap out of it Apple. Surprise us in 2016.
  • Reply 4 of 57
    rogifan_newrogifan_new Posts: 3,825member
    Maybe it's just me but I don't get why Wall Street is so obsessed with a 4" phone with last years specs. What's the big deal?
    6SgoldfishSir_Turkey
  • Reply 5 of 57
    chasmchasm Posts: 1,266member
    saarek said:
    Our credit card is at the ready. My wife's old iPhone 5c has had better days and she doesn't want a "big" phone like my iPhone 6.

    Huge market out there for those that want the smaller form factor.

    I just hope they don't neuter it with sub 6s specs.
    I'll resist making the joke about your wife and smaller size expectations and instead simply say that my wife felt much the same about her iPhone 4 until I gave her my old iPhone 5s and got myself an iPhone 6s. She has since suddenly discovered -- after being sure that the iPhone 6 and later were too big for her smallish hands -- that she likes my iPhone better.
  • Reply 6 of 57
    chasmchasm Posts: 1,266member
    Also, it bears noting that this thus-far-imaginary four-inch revamp Frankenphone -- even if it actually did contribute $5.5B in a year -- would make up possibly as much as four percent of iPhone sales. Apple made $231B in revenue in 2015, and at least $150B of that was iPhones. There's no figures on how well the iPhone 5s (a four-inch iPhone still sold as new to this very day) is doing, but I'd guess about the same percentage. So you're going to have to explain to me again why Apple has any motivation to do this other than as an experiment.
  • Reply 7 of 57
    pscooter63pscooter63 Posts: 912member
    Having read several articles today on the stunning S7 Edge
    Stunning in an emperor-has-no-clothes way, yes.
    baconstang
  • Reply 8 of 57
    6Sgoldfish6Sgoldfish Posts: 108member
    Having read several articles today on the stunning S7 Edge
    Stunning in an emperor-has-no-clothes way, yes.
    I wonder what's informing your opinion. Have you actually seen it or read about it?
  • Reply 9 of 57
    jfc1138jfc1138 Posts: 3,090member
    saarek said:
    Our credit card is at the ready. My wife's old iPhone 5c has had better days and she doesn't want a "big" phone like my iPhone 6.

    Huge market out there for those that want the smaller form factor.

    I just hope they don't neuter it with sub 6s specs.
    Even were it "neutered" to some extent it would still blow away the 5c performance by leaps and bounds, which would be the actual point would it not?
    netmage
  • Reply 10 of 57
    jfc1138jfc1138 Posts: 3,090member

    Stunning in an emperor-has-no-clothes way, yes.
    I wonder what's informing your opinion. Have you actually seen it or read about it?
    Slow (versus 6s and 6s Plus) with poor battery life (versus even the previous gen Galaxy)?

    yeah, quite the nude.
    edited March 2016
  • Reply 11 of 57
    saareksaarek Posts: 1,105member
    jfc1138 said:
    saarek said:
    Our credit card is at the ready. My wife's old iPhone 5c has had better days and she doesn't want a "big" phone like my iPhone 6.

    Huge market out there for those that want the smaller form factor.

    I just hope they don't neuter it with sub 6s specs.
    Even were it "neutered" to some extent it would still blow away the 5c performance by leaps and bounds, which would be the actual point would it not?

    It would certainly be faster, of course. But we were ultimately disappointed in the iPhone 5c, had expected at least 3 years good use out of it and it's barely lasted 2 years.

    Her iPhone 3GS and my old iPhone 4S both lasted 4 years, so the 5c is disappointing.

    The main reason is specifications. If it has the A9 and 2gb of ram, the amount of ram arguably being more important than the CPU, I'd hope it would last her 4 years.
  • Reply 12 of 57
    saareksaarek Posts: 1,105member

    chasm said:
    saarek said:
    Our credit card is at the ready. My wife's old iPhone 5c has had better days and she doesn't want a "big" phone like my iPhone 6.

    Huge market out there for those that want the smaller form factor.

    I just hope they don't neuter it with sub 6s specs.
    I'll resist making the joke about your wife and smaller size expectations and instead simply say that my wife felt much the same about her iPhone 4 until I gave her my old iPhone 5s and got myself an iPhone 6s. She has since suddenly discovered -- after being sure that the iPhone 6 and later were too big for her smallish hands -- that she likes my iPhone better.
    She's used my iPhone quite a bit, tends to pick up whichever iDevice is nearest to her in the evenings.

    Ultimately she prefers the 4" size, she hates not being able to reach the top of the screen with her thumb.

    Apple spent years extolling the virtues of the smaller form factor, as well they should, there are advantages to it. 

    Personally I prefer the bigger phones but know quite a few people who want a smaller one.

    It certainly won't hurt Apple to have a line up that covers the sweet spot of all types of size.
    baconstangnetmagedouglas bailey
  • Reply 13 of 57
    6Sgoldfish6Sgoldfish Posts: 108member
    jfc1138 said:

    I wonder what's informing your opinion. Have you actually seen it or read about it?
    Slow (versus 6s and 6s Plus) with poor battery life (versus even the previous gen Galaxy)?

    yeah, quite the nude.
    How can you know that, it hasn't even been benchmarked yet. And by the looks of it.. yea, it's one hell of a good-looking device. 
    netmage
  • Reply 14 of 57
    dachardachar Posts: 330member
    chasm said:
    Also, it bears noting that this thus-far-imaginary four-inch revamp Frankenphone -- even if it actually did contribute $5.5B in a year -- would make up possibly as much as four percent of iPhone sales. Apple made $231B in revenue in 2015, and at least $150B of that was iPhones. There's no figures on how well the iPhone 5s (a four-inch iPhone still sold as new to this very day) is doing, but I'd guess about the same percentage. So you're going to have to explain to me again why Apple has any motivation to do this other than as an experiment.
    Apple has the information on sales and knows that there are many 4 inch iPhone users who have not upgraded since the introduction of the larger 6 models or even earlier. I have kept my 5 for three years. The common view, at least on AI, appears to be some don't like the bigger iPhones. I think this new 4 inch iPhone will demonstrate if Apple are looking for further growth or if they are happy to just coast with a relatively minor upgrade of the 5S.
  • Reply 15 of 57
    mac_128mac_128 Posts: 3,399member
    saarek said:
    jfc1138 said:
    Even were it "neutered" to some extent it would still blow away the 5c performance by leaps and bounds, which would be the actual point would it not?

    It would certainly be faster, of course. But we were ultimately disappointed in the iPhone 5c, had expected at least 3 years good use out of it and it's barely lasted 2 years.

    Her iPhone 3GS and my old iPhone 4S both lasted 4 years, so the 5c is disappointing.

    The main reason is specifications. If it has the A9 and 2gb of ram, the amount of ram arguably being more important than the CPU, I'd hope it would last her 4 years.
    Disappointing how?

    I have the 5s, I bought it a month after they released the 6, upgrading from the 4, because I didn't want a bigger phone. It's a fantastic phone, and if there wasn't the prospect of a new 4" iPhone with Pay coming out in a couple of weeks, I'd be planning to keep it as long as it takes, and would likely pay to repair what I consider a warranty issue that Apple won't acknowledge. It's perhaps the best iPhone I've ever had.
  • Reply 16 of 57
    saareksaarek Posts: 1,105member
    mac_128 said:
    saarek said:

    It would certainly be faster, of course. But we were ultimately disappointed in the iPhone 5c, had expected at least 3 years good use out of it and it's barely lasted 2 years.

    Her iPhone 3GS and my old iPhone 4S both lasted 4 years, so the 5c is disappointing.

    The main reason is specifications. If it has the A9 and 2gb of ram, the amount of ram arguably being more important than the CPU, I'd hope it would last her 4 years.
    Disappointing how?

    I have the 5s, I bought it a month after they released the 6, upgrading from the 4, because I didn't want a bigger phone. It's a fantastic phone, and if there wasn't the prospect of a new 4" iPhone with Pay coming out in a couple of weeks, I'd be planning to keep it as long as it takes, and would likely pay to repair what I consider a warranty issue that Apple won't acknowledge. It's perhaps the best iPhone I've ever had.
    But my wife does not have the 5S, she has the 5C.

    Totally different.
    baconstang
  • Reply 17 of 57
    it's one hell of a...
    There was an article/thread to feed your fandom posted only a few hours ago.  And yet you have not posted there.

    Hmm.
    napoleon_phoneapart
  • Reply 18 of 57
    jony0jony0 Posts: 269member
    jfc1138 said:

    Slow (versus 6s and 6s Plus) with poor battery life (versus even the previous gen Galaxy)?

    yeah, quite the nude.
    How can you know that, it hasn't even been benchmarked yet. And by the looks of it.. yea, it's one hell of a good-looking device. 
    Yes it has, many commenters have been over this :

    Early reviews peg Samsung's Galaxy S7 as a serious contender for best smartphone - iPhone Discussions on AppleInsider Forums

    Goto Reply 59 :
    donth8 said:
    And yet the S7 is still slower CPU wise even though it is 6 months newer:

    http://www.anandtech.com/show/10120/the-samsung-galaxy-s7-review/3

    Oh and it seems to overheat after high usage:



    Spoiler alert on the first 4 Anandtech Benchmarks, it's not even close :


    6Sgoldfishbaconstangkevin keemacky the mackyJamesBB
  • Reply 19 of 57
    it's one hell of a...
    There was an article/thread to feed your fandom posted only a few hours ago.  And yet you have not posted there.

    Hmm.
    Why would I? "Fandom"? Dissent doesn't equal fanboy-ism. I don't even like Samsung. All I want is for Apple to pick up the pace. I’ve been a long time Apple user and definitely want to stay that way, but it’s bloody difficult when they keep dropping the ball on updating their products. From iPhones to Macs, the update cycles feel glacial and industrial/product design feels like an afterthought. 
    edited March 2016
  • Reply 20 of 57
    sflocalsflocal Posts: 4,493member
    There was an article/thread to feed your fandom posted only a few hours ago.  And yet you have not posted there.

    Hmm.
    Why would I? "Fandom"? Dissent doesn't equal fanboy-ism. I don't even like Samsung. All I want is for Apple to pick up the pace. I’ve been a long time Apple user and definitely want to stay that way, but it’s bloody difficult when they keep dropping the ball on updating their products. From iPhones to Macs, the update cycles feel glacial and industrial/product design feels like an afterthought. 
    Macs have been slower due to Intel taking longer to release newer CPU's.  That being said, what more are you asking?  They're still the best machines out there, best displays, and best quality, fasted SSD performance.. etc...  You want to play high-end video games, go elsewhere.  Otherwise, Apple does what it can with what's out there.  My 4-month old 5K iMac is the best machine I've owned yet.  Period.

    iOS devices have been consistently updated every year, and is always the best performing units compared to whatever crap Samsung comes out with.  What more do you expect?  You want Apple to introduce iPhones every 6-months?  Then folks like you will complain that the devices are already obsolete after a few months?
    edited March 2016 baconstangnolamacguy
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