'iPhone SE' predicted to be a hit with Apple upgraders, selling up to 15M per year

Posted:
in AAPL Investors
While larger iPhones have driven sales among switchers, a new 4-inch iPhone is likely to drive upgrades among existing Apple users, to the tune of up to 15 million units per year, one analyst believes.


Source: OnLeaks via Twitter


Amit Daryanani of RBC Capital Markets issued a note to investors on Wednesday, noting that only 40 percent of the install base has upgraded to Apple's larger 4.7- or 5.5-inch iPhone models.
RBC believes Apple could sell up to 15 million 4-inch "iPhone SE" units priced starting at $549.
He believes next week's expected debut of the 4-inch "iPhone SE" is a strategic move by Apple to accelerate existing users' upgrade cycles. With a new 4-inch iPhone featuring many of the same components as the flagship iPhone 6s, but priced more aggressively, he believes Apple will be able to appeal to those who prefer the smaller form factor, as well as budget conscious consumers.

Daryanani's projections call for Apple to sell between 10 million and 15 million "iPhone SE" units annually. He admitted that would be a "modest" amount for Apple, but the timing is key: A late March launch would allow Apple to provide a buffer in the upcoming June and September quarters, leading up to the debut of a flagship "iPhone 7."

And while some rumors have suggested the "iPhone SE" will take the place of the iPhone 5s and be priced at $449, Daryanani believes the premium construction and components will see the "iPhone SE" priced higher, at $549.

The "iPhone SE" is rumored to feature the same A9 processor, support for Apple Pay, and 12-megapixel iSight camera as the high-end iPhone 6s. A tipster suggested to AppleInsider this week that it will also shoot 4K video.

Aside from a smaller display, the key differentiating factor between the iPhone 6s and the "iPhone SE" is believed to be the lack of a 3D Touch force sensing display in the latter.

All will be revealed next Monday, when Apple will hold a press event at its Cupertino, Calif., headquarters. The event kicks off at 10 a.m. Pacific, 1 p.m. Eastern, and will be streamed live online and on the Apple TV.

For a full rundown of what to expect, see AppleInsider's March 21 rumor roundup.
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Comments

  • Reply 1 of 28
    irelandireland Posts: 17,547member
    My idea iPhone is ~4.25" but if needs be ill buy this instead. I find the standard 6/6s too large for my needs. I'd never watch a long video on something small than a 13" MBA, I need a smartphone for quick-dipping only. I want the pocket-comfort only a small phone can provide.
    baconstangargonaut
  • Reply 2 of 28
    Apple will never go budget... this will destroy their brand as people will then wait for budget 5 inch phone... it will just be a 4 inch iphone 6s... 

    Have you even seen Louis Vuitton or Chanel go budget to take share from Gap...

    only reason for an offset introduction (eg. not in September) is simply an operational issue; it is getting harder and harder for Apple to ramp up the full iPhone supply-chain in one go... Very likely that given volumes at stake, Apple will have 2 introduction dates per year... for instance one for larger screen in September... and one for smaller screens but mostly same components in March when all component suppliers are up and running at full speed.

    1983nolamacguynostrathomasjony0
  • Reply 3 of 28
    tmaytmay Posts: 3,555member
    astoessel said:
    Apple will never go budget... this will destroy their brand as people will then wait for budget 5 inch phone... it will just be a 4 inch iphone 6s... 

    Have you even seen Louis Vuitton or Chanel go budget to take share from Gap...

    only reason for an offset introduction (eg. not in September) is simply an operational issue; it is getting harder and harder for Apple to ramp up the full iPhone supply-chain in one go... Very likely that given volumes at stake, Apple will have 2 introduction dates per year... for instance one for larger screen in September... and one for smaller screens but mostly same components in March when all component suppliers are up and running at full speed.

    Yeah, I think that's correct.

    At some point, I imagine that there will be an iOS notebook targeted at education, analogous to a Mac Book, but al a better price point (no Intel Inside), and that will have to be released in late spring for the fall school year.


  • Reply 4 of 28
    I think they should call it the iPhone 6e as in:

    You won't find a 6e-er phone anywhere!

    ;-)
    radarthekaticoco3argonautdouglas baileyjony0
  • Reply 5 of 28
    19831983 Posts: 1,158member
    I think the SE looks a lot like the 5S because the latter is going to remain in the lineup at a lower price point. At least for another year and to provide design continuity. Then at same time next year the SE will become the budget model together with an SE2 incorporating components from the 7 flagship, and so on...
  • Reply 6 of 28
    I bought a 6S last fall, but after using my wife's 5S for a bit the other day, I realized how much I miss the smaller form factor and the sleep/wake button up top. I may upgrade from the 6S to the SE. I've realized I like to use the phone one-handed a lot, and the 6S is difficult to use in that manner, plus, the 5S size fits my hand perfectly. Assuming the rumors are correct and the camera will match that on the 6S, I think it's time to upgrade.
    argonaut
  • Reply 7 of 28
    mcarlingmcarling Posts: 1,106member
    15M seems like a low-ball estimate to me.  I estimate 20-25M during 2016 if it will have an A9 processor, the iPhone 6S' camera, and will support Apple Pay.
    trumptman
  • Reply 8 of 28
    Isn't this going to be a lead into a negative story by Wall Street of how Apple is trading a higher profit margin iPhone business to a lower margin iPhone business? Apple never wins. Analysts say Apple should sell less expensive iPhones to gain market share, but as soon as they do, the analysts claim how iPhone profit margins and ASPs are dropping terribly. I'm curious as to what countries are going to be buying most of these "budget" iPhones. In India, this iPhone will be going up against $150 Android smartphones which will likely be seen as a tough sell for Apple. I don't know what reasonable sales expectations will be set for this baby iPhone but I'm sure expectations will be higher than whatever Apple actually meets based on how Wall Street usually handicaps Apple.
  • Reply 9 of 28
    eightzeroeightzero Posts: 2,291member
    Single data point only: I am a iPhone 5s user, and find it sufficient for my purposes. I have thus not looked at the 6/6+/6s/6s+ lineup because i simply don't need them. However, when the 5s dies, I'll need to replace it, and I like it's form and size. I would go with the SE.
    pscooter63
  • Reply 10 of 28
    icoco3icoco3 Posts: 1,458member
    astoessel said:
    ...
    only reason for an offset introduction (eg. not in September) is simply an operational issue; it is getting harder and harder for Apple to ramp up the full iPhone supply-chain in one go... Very likely that given volumes at stake, Apple will have 2 introduction dates per year... for instance one for larger screen in September... and one for smaller screens but mostly same components in March when all component suppliers are up and running at full speed.

    Maybe that explains what was seen in the supply chain as they were making room for another model.  Just no one knew at the time as to why.  Just personal speculation.
  • Reply 11 of 28
    schlackschlack Posts: 686member
    arrrrr. stop this budget phone talk!!! this will be a full featured premium phone with a premium price. that's what the market wants. so many peeps waiting for a 4" phone to upgrade. expect $550 to $750 for pricing.
  • Reply 12 of 28
    chasmchasm Posts: 1,266member
    Let me be sure I have this correct: this four-inch iPhone SE or whatever is going to cost the same as the currently available iPhone 5s, and sell about the same number of units the 5s currently does, but will be a "hit" at 15M units per YEAR while Apple sells 50-75M units of the other models PER QUARTER. Um ...
  • Reply 13 of 28
    trumptmantrumptman Posts: 16,454member
    I would love to give another 4 inch phone size a try. I have an iPhone 4S that I have rigged to a Tmobile tablet plan for fun. The size of the smaller iPhones is great. The only thing not so great anymore are my eyes. They, and not my desire for one handed use, would be the determining factor.
    argonautpscooter63
  • Reply 14 of 28
    I handled my old iphone 5 last night and expected it to feel small after having my 6S for so long now. Surprisingly, it felt "just right" still, and whipping out my 6S in the other hand, it still felt too big imho. I'll be sorely tempted to swap my 6S for this if it is similar spec-wise and not a dumbed down model.
  • Reply 15 of 28
    nicnacnicnac Posts: 59member
    Need to start a pool on how long it will take the media and Wall Street to declare it a failure at only 14.9 million units sold.
    Sir_Turkey
  • Reply 16 of 28
    bbhbbh Posts: 66member
    I take my iPad mini with me everywhere just like my iPhone 6. For me, if the 5E is not technologically crippled versus the "7", I'd op for the smaller phone.
  • Reply 17 of 28
    WundrWundr Posts: 4member
    While larger iPhones have driven sales among switchers, a new 4-inch iPhone ...
    Already seen in the wild, the iPhone8,4 ...
    http://oi66.tinypic.com/2mwh7bk.jpg

    The iPhone 5S new and unlocked at Walmart for $200:
    http://www.walmart.com/ip/Straight-Talk-Apple-iPhone-5S-16GB-4G-LTE-Prepaid-Smartphone/33152937

    (Straight Talk phones are unlocked)

    edited March 2016
  • Reply 18 of 28
    jackansijackansi Posts: 116member
    I wouldn't be surprised if it has the same A8 that the iPhone 6 has.  I'd also not be shocked that it only matches (at best) the rest of the features from the 6.  Best case it will be a clocked down A9 with 1GB RAM, but I just can't picture why they would be so generous...

    Anything above that just doesn't fit Apple as I have experienced it in the last 9 years.
  • Reply 19 of 28
    astoessel said:
    Apple will never go budget... this will destroy their brand.

    The iPhone 5C and Mac mini have not destroyed their brand.  Those are both budget products.  The 5C is a cheaper iPhone 5 and the Mac mini is a budget Mac for those that already have a keyboard, mouse and display.  All previous iPhones have also been budget iPhones when a newer model is released.  The iPhone 3GS, 4, 4S, 5 and 5S were all re-released as budget iPhones with reduced storage and a lower cost, or even free with contract.  So Apple has always gone budget.  Apple even had budget Macs back in the early 1990s with the Macintosh LC, which stood for low-cost.  It was a budget Mac compared to the more expensive and more powerful Mac II series.  
  • Reply 20 of 28
    mcarling said:
    15M seems like a low-ball estimate to me.  I estimate 20-25M during 2016 if it will have an A9 processor, the iPhone 6S' camera, and will support Apple Pay.
    I agree. The smaller form factor is still very appealing to many. And the price will be $450.

    Apple Insider should track the accuracy of these "analysts". There can't be more than 40-50 of them. Get an intern to set up a spreadsheet. This guy would get -2 for the wrong price and quantity.
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