Apple unlikely to refresh iPhone SE in March 2017, analyst says

Posted:
in iPhone edited November 2016
As Apple faces pressure to maintain high gross margins amidst flagging iPhone sales, well-connected analyst Ming-Chi Kuo suggests the company will not apply an annual refresh cycle to its affordable, small form-factor iPhone SE handset.




In a note to investors obtained by AppleInsider on Friday, Kuo says Apple will prolong iPhone SE's lifecycle beyond the usual one year rotation in a bid to boost gross margins and minimize cannibalization of high-end flagships like the iPhone 7.

Specifically, Kuo says a new iPhone SE model is unlikely to launch in the second fiscal quarter of 2017, which for Apple ends in March. The 4-inch iPhone variant debuted this year on March 31, leaving some to speculate that a next-generation version with updated internals would see release at roughly the same time in 2017. Kuo does not mention plans beyond the second quarter, meaning a refresh might land later in the year.

The supposed decision to hold off on an iPhone SE revamp owes in part to lower than expected gross margin guidance for the current first fiscal quarter of 2017. During Apple's most recent quarterly earning conference call, the company said it anticipates gross margins between 38 percent and 38.5 percent for the three-month period ending in December, below consensus of more than 39 percent and down from 40.1 percent in 2015.

Along with nixing an immediate iPhone SE update, Apple is taking other steps to goose profits.

In particular, the Cupertino tech giant has been putting pressure on component manufacturers to reduce prices, a measure that effectively reduces supply chain costs, Kuo says. Major suppliers of key components, like Samsung and TSMC, have bargaining power and are unlikely to be impacted by the belt-tightening, but smaller producers could see calls for price cuts arrive in November and December.

That being said, Samsung might raise prices for 3GB DRAM and 3D NAND flash as those components remain in short supply.

Kuo forecasts iPhone shipment volumes of 40 million to 50 million units for the current quarter, down year-over-year from 51.2 million units, on conservative sell-through for 4.7-inch iPhones and weakening demand in China. Looking ahead, he estimates total iPhone shipment volume to reach 35 million to 40 million units in the second quarter of 2017, down from 40.4 million units at the same time last year.
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Comments

  • Reply 1 of 53
    From what I read when the SE was released, I'm not surprised. Apple was only to revisit the SE for upgrades once every 2 to 3 years. For the current guts that it has, I expect it. Sorry sog if I beat you here.
    king editor the grateDeelron
  • Reply 2 of 53
    Expect a new SE in March 2017 then. 
    netmage1983
  • Reply 3 of 53
    Well this iPhone would not be called 'Special Edition' if it were updated every year, now would it?
    edited November 2016 nolamacguy1983
  • Reply 4 of 53
    red oakred oak Posts: 670member
    Apple sold 75 million last year this (current) quarter. Not 51 million
    edited November 2016 ireland
  • Reply 5 of 53
    g-newsg-news Posts: 1,107member
    SE = six year edition.
    Remember, the nMP is the Mac Pro for the next ten years, too.

    edited November 2016
  • Reply 6 of 53
    Well it is mostly iPhone 6S components in there so it is a capable phone.
    baconstangdesignrrepressthisDeelrondouglas baileypscooter631983tyler82magman1979jony0
  • Reply 7 of 53
    robjnrobjn Posts: 210member
    SE
    stands for "Special Edition".
    It's a stop gap.

    They underestimated demand for a smaller phone and had no plans to release such for 6 6s or 7. Once they realized there was demand they could quickly develop the SE by using parts from the 5 series.

    In either 2017 or 2018 they will have new smaller phones as part of the main product line.
    stanthemanrepressthisDeelron1983mattinozbigpics
  • Reply 8 of 53
    irelandireland Posts: 17,623member
    Either in 2017 or 2018 the next step is to give us 3 sizes of Apple's new flagship. Or if it makes sense 2 sizes without bezels. But if the smaller of the two ends up any physically wider than SE, depending largely on which display size they attempt, they'll need 3 sizes to tempt SE upgraders. Love my SE. Areas it could improve upon in the future: black levels, FaceTime/selfie cam upgrade, low-light photography (iSight cam), 3D Touch. Everything else is good enough and improvements like additional battery life and larger display in same width body and P3 colour would be icing.

    My two largest worries for iPhone going forward is if they do get rid of top/button areas battery life may suffer and at a minimum will not improve. And my second is if they do get rid of that seperate home button—I have my doubts—does the home button require a tap to show itself and as a result is annoying or less intuitive for any user.
    edited November 2016 repressthispscooter63
  • Reply 9 of 53
    Well this iPhone would not be called 'Special Edition' if it were updated every year, now would it?
    Remember they named it before they got surprised by how popular it was. I also have no idea what they'll name the next 4" but I'll buy it. I'm not expecting it in March though. I'd like to see it come out the same time as the iPhone 7s/8/10th iPhone (what are we calling that?)
    repressthis
  • Reply 10 of 53
    NY1822NY1822 Posts: 599member
    So this guy not only gives a prediction with a range of 20% (40-50 Million iphone sold in current quarter), he misquotes the actual sales number from last year, and goes against the release of a new model phone (7) in the holiday quarter, with the largest percentage of eligible upgrades out there ever, all while their largest competitor has shut down, and to top it off Apple has guided between $76-$78B in revenue for the current quarter (which basically is +75 million phones sold). do these guys just have templates for articles and just change the date on them.

    update: 51.2 iphones sold is Q2 2016's numbers, so this article is a mess
    edited November 2016 donaldchumprepressthisDeelronpscooter63magman1979jony0
  • Reply 11 of 53
    irelandireland Posts: 17,623member
    Kuo couldn't predict how many shits Tim Cook may have tomorrow.
    edited November 2016 BillySoftcockmagman1979
  • Reply 12 of 53
    mjtomlinmjtomlin Posts: 1,876member
    I always figured this was going to be a stopgap device for 4" holdouts. At least until Apple could create a 4.7" phone with an overall smaller design or add a third size to the line. By Fall of 2018 when the iPhone 8 is released, iPhone SE users will be ready to upgrade and then we'll see Apple's answer.
  • Reply 13 of 53
    wood1208wood1208 Posts: 1,970member
    Nothing new here. Practical approach Apple knows is SE upgrade on 2-3 year cycle for those who never want to use larger phones like my Dad. To keep cost down with good hardware inside, have trickle down spec from it's larger sibling. Focus should always be on larger phones.
    edited November 2016 repressthisDeelron
  • Reply 14 of 53
    schlackschlack Posts: 697member
    Wow, first the MBP w/ TB pricing miss, now no new SE update in March? What's going on Apple??
  • Reply 15 of 53
    wood1208 said:
    Nothing new here. Practical approach Apple knows is SE upgrade on 2-3 year cycle for those who never want to use larger phones like my Dad. To keep cost down with good hardware inside, have trickle down spec from it's larger sibling. Focus should always be on larger phones.
    I disagree. 

    Focus should be on in all three sizes. Delivering a unified model across all three. 
    douglas bailey
  • Reply 16 of 53
    NY1822 said:
    So this guy not only gives a prediction with a range of 20% (40-50 Million iphone sold in current quarter), he misquotes the actual sales number from last year, and goes against the release of a new model phone (7) in the holiday quarter, with the largest percentage of eligible upgrades out there ever, all while their largest competitor has shut down, and to top it off Apple has guided between $76-$78B in revenue for the current quarter (which basically is +75 million phones sold). do these guys just have templates for articles and just change the date on them.

    update: 51.2 iphones sold is Q2 2016's numbers, so this article is a mess
    Eeeegzactly
  • Reply 17 of 53
    linkmanlinkman Posts: 916member
    Now that the 7 series has been released the biggest feature absent from the SE is water resistance. Seeing how many phones die an early death from water intrusion I find it tough to recommend that model now.
  • Reply 18 of 53
    hope to see the bezel free iphones retain the same resolution and be small devices. No more need for thinner, better to reduce height and width than depth.

    might be a good move for Apple to launch the 5.5" device in Sept, the 4.7" in Dec and the 4" the following spring. Might maximise profits.
    baconstang
  • Reply 19 of 53
    designrdesignr Posts: 517member
    Expect a new SE in March 2017 then. 
    Yeah. Probably. Maybe this becomes their "off year" entry-level model. Fine for me. I like the size, etc. It's basically an iPhone 6 (or maybe 6S) in an iPhone 5 case.

    I expect the same in March 2017: iPhone 7 in the same/similar SE case. Works for lots of people. Not everyone needs or wants the latest and greatest the day it comes out. Plus the size issue.

    I think we're approaching "peak smartphone" in the sense that the additional technology and features are hitting a point of diminishing marginal value.
    repressthisbaconstangMichael Leedy
  • Reply 20 of 53
    Kuo strikes again. This wouldn't surprise me though. I can't wait for the day when Apple is focused on making the best products possible not margins. It would be a shame if this product didn't get refreshed because it was too popular and didn't have high enough margins. But I get it, Apple makes more profit than anyone in history and that's all that's matters these days.
    GeorgeBMacbigpics
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