Apple: smart decision of iPhone – Apple Inc. (NASDAQ: AAPL)



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In my coverage of Apple (AAPL) on this site in recent months, I have made it clear that I am a great admirer of the iPhone SE. For my needs, it was a perfect mix of features and price, and I really do not like big-screen phablets that can be painful to wear. For Apple, I have discussed the number of small screen followers who are still decent, and how I expected the company to continue to keep a phone like the SE in its lineup. Last week, there was a report that suggested we would see this new phone during the first half of 2018. Today, I will explain why I think it's a good move for both consumers and investors.

Apple does not publish sales numbers for individual models of its iPhones, but of all the accounts, the SE has done quite well. In July, I discussed some recent data that suggested that the device had sold about 8.5 million units in its first five quarters, and that was only in the United States. With numbers like that, he could argue that worldwide sales of the device could approach 10 million per year. While that may be only a small portion of Apple's overall business, it remains a significant number of consumers who would like to keep it happy. It is not a fact that many of them would switch to a larger Apple screen if the SE were eliminated.

Apple originally launched the iPhone SE in the spring of 2016. This year, the only change was to increase storage versions. As a result, many of its key internal elements will take two years to the spring of 2018, which is a life for smartphones and their technology. In the table below, I have detailed some key comparisons for the SE against the newest 8 and X

( Source: GSM Statistics of Sand for iPhone SE, iPhone 8 and iPhone X)

The report on a new SE for next year says the device could be priced at around $ 450. That would be an increase in the price of $ 399 that originally had the SE, but is getting much better technology. In addition, this new model could start with 64 GB of storage, compared to previous models, and with the huge increase in DRAM prices recently, an initial price of $ 450 is still far below the iPhone 8.

To keep prices at a decent level, you probably do not get all the details of the iPhone X. It would almost guarantee that a new SE does not have a FaceID, and I would be very surprised if it had the dual camera configuration of the recent Plus models. and X. Where you would see the main differences with respect to the original SE would be the possible Bionic A11 chip, a better primary and secondary camera, Bluetooth 5.0, etc., while you get the smaller screen and the form factor that those like me we prefer

When we learn about a less expensive iPhone, many quickly come to the conclusion that this is a move to emerging markets. While that may be true to some extent, some markets like India still see most of their sales at less than $ 200. Some of the economies of these countries are in better shape than when the SE was originally launched, so that It will help, but nobody should expect Apple to make big profits when it is rumored that SE 2 will cost $ 450. If Apple really wanted to gain market share worldwide, it would need a phone with a price of half. Still, it's a way for some global consumers to get an iPhone, which in some markets is considered a status symbol, for much less than a new basic phone like the 8.

In the end, the potential decision by Apple to Bringing back an updated iPhone SE is a win for both consumers and investors. This phone is in favor of millions of consumers like me who prefer a phone that is easier to transport or those that are looking for a lower price. With estimated sales that could reach 10 million a year, the phone still generates a few billion in annual revenue for the company. By the spring of 2018, Apple will probably have enough supply of key components to incorporate its latest technology into this device, so it is likely that it can be marketed as the most powerful four-inch screen phone on the planet. I've been discussing a movement like this for several months, so I'm definitely in favor of Apple doing this. What do you think?

Disclosure: We have no positions in any of the mentioned actions, and there are no plans to start any positions within the next 72 hours.

I wrote this article myself, and expressed my own opinions I am not receiving compensation for it (other than Seeking Alpha). I have no business relationship with any company whose actions are mentioned in this article.

Additional Disclosure: Investors are always reminded that before making any investment, they must perform their own due diligence on any name mentioned directly or indirectly. in this article. Investors should also consider seeking advice from a broker or financial advisor before making any investment decision. Any material in this article should be considered general information, and should not be considered a formal investment recommendation.

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