When Apple released the iPhone SE this past March, it marked a long overdue admission that a good number of iPhone users simply prefer a smaller 4-inch form factor. For many, Apple’s 4.7-inch and 5.5-inch iPhone models are simply too unwieldy for everyday use.
To its credit, Apple didn’t do anything to hinder the iPhone SE or dissuade users from buying it. Aside from the lack of 3D Touch, the iPhone SE at launch was essentially the same device as the then-current iPhone 6s, albeit in a smaller form factor.
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To date, the iPhone SE has been something of a sleeper hit for Apple, with Tim Cook even noting that demand for the device was much higher than the company anticipated. Still, a new research report from KGI Securities analyst Ming-Chi Kuo relays that Apple isn’t planning to grace the iPhone SE with an annual refresh in March of 2017.
In a note obtained by Mac Rumors, Kuo explains that Apple is planning to keep the iPhone SE as-is for the time being.
The reason?
Apple wants to keep its margins high by subtly encouraging users to upgrade to the more margin-friendly iPhone 7 and iPhone 7 Plus.
Kuo forecasts that total shipment volume of iPhones will decline in the first half of 2017 due to tepid demand in China, slow shipment volume of 4.7-inch iPhones and the lack of an iPhone SE refresh in the second quarter of the year. Kuo argues that shipment volume came in higher in the first half of 2016 due to “upbeat demand for the iPhone SE.”
Instead, Kuo believes Apple will exert pressure on its iPhone component makers to drop prices in an effort to maintain its margins. He expects suppliers to begin price reductions on components in either November or December of this year.
For the current quarter, Kuo anticipates iPhone sales to check in anywhere between 40 million and 50 million units, falling slightly below last year’s holiday quarter that saw Apple sell 51.2 million iPhones.
