Prominent KGI Securities analyst Ming-Chi Kuo is back once again with a note issued to investors, this time focused on Apple’s iPhone SE smartphone, and more importantly, his belief that the Cupertino-based company will not issue a refresh of the device this coming March.
The same research note suggests that Apple won’t immediately look to discontinue the affordable, 4-inch device, but will look to prolong its life cycle beyond the usual 12 month period in order to boost gross margins at a time when sales of the iPhone range are starting to flag.
Apple’s original iPhone SE handset, which was intended to be offered as an affordable solution for price savvy consumers and those in emerging economies, was launched earlier this year in the month of March.
Given the fact that Apple has traditionally shown a willingness and dedication to update its iPhone lines on a strict 12-month cycle, it led many to believe that the company would look to release a new affordable iPhone SE device this coming March, or during the company’s second fiscal quarter of 2017. Ming-Chi Kuo simply believes that will not happen.
As mentioned earlier, Apple is doing this to not only boost its gross margins, but also because it does not want to cannibalize sales of its iPhone 7 and iPhone 7 Plus flagships.
In addition to keeping the current iPhone SE around, Apple is also looking to take additional steps to ramp up profits, such as applying pressure to component manufacturers in order to try and have prices reduced. This may not be ideal for those having to reduce costs to keep the buying power of Apple happy, but it would instantly reduce supply chain costs for the world’s richest company.
Along with the iPhone SE information in the note, Ming-Chi Kuo has also made some iPhone shipment estimations, suggesting that Apple could move 40 to 50 million devices this quarter, which would be a reduction on the 51.2 million units sold during the same quarter last year. The same level of negative has been applied to projected shipments for the second quarter of 2017, with sales expected to drop to around the 35 to 40 million mark, down from 40.4 million year-on-year.
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