That’s one reason why analysts and journalists alike were surprised when rumors began to swirl that Apple might release a similarly underpowered iPhone in 2016. But with a spring launch window and a new approach to design, the outlook has changed significantly when it comes to the iPhone 5se.
In a note to investors this week, Amit Daryanani of RBC Capital Markets predicts that the 4-inch iPhone will add $5.5 billion in sales in 2016, assuming the phone launches at an average selling price of $550. Even after the inevitable cannibalization that will come along with the launch of a smaller phone, Daryanani still expects 10 million iPhone 5se sales.
Even if the iPhone 5se fails to break any records, Daryanani believes that the lower-priced model will at least drive upgrades for users who still own iPhone 5s and iPhone 5c units, especially in emerging markets such as India.
Additionally, RBC expects Apple to produce less than 20 million iPhone 5se units for the entirety of fiscal year 2016, which would be a relatively low risk considering how many flagship units the company manufactures in the same time frame.
All in all, despite the fact that the iPhone sales are finally expected to decline next quarter, the iPhone 5se could have a “modest positive impact” on Apple’s bottom line in 2016 if RBC’s predictions come to pass.