Apple’s iPhone shipments could jump by as much as 10% on a year-over-year basis in the first quarter of 2020, widely followed Apple (NASDAQ:AAPL) analyst Ming-Chi Kuo wrote in a research note to investors, affirming strong demand for Cupertino’s most important gadget.
Kuo’s growth prediction is partially based on the introduction of Apple’s next version of the iPhone SE 2, which he believes will be more affordable than the rest of the Apple iPhone lineup even as it feature the same A13 Bionic chip with 3 GB RAM found in the new iPhone 11 models.
“The most significant hardware spec upgrade will be the adoption of the A13 processor and 3GB LPDDR4X,” Kuo wrote in his research, noting that the iPhone SE 2 “will likely increase iPhone’s market share and benefit Apple’s promotions for service and content.”
The note also predicts that Apple’s key target market for SE 2 would be customers who still use older models like the iPhone 6 and 6 Plus. In Kuo’s view, a spec-bumped iPhone 8 appeals to people who don’t care much about the latest technology and are fine with features like Touch ID and a single-lens rear camera. But what these customers do want is a fast iPhone experience able to take advantage of the latest iOS features. Kuo believes the SE 2 will be the “best upgrade choice” for an estimated 100 million remaining iPhone 6 and iPhone 6 Plus users.
It’s not known yet what price Apple may target for the SE 2 but the original 4-inch iPhone SE which launched in 2016 for the entry-level price of $399 was later reduced to $349. It’s also unclear whether the SE 2 will feature the iPhone 8’s 4.7-inch LCD screen. Despite these missing details, Kuo estimates Apple will be able to sell between 30-40 million units across FY2020.
Kuo’s prediction lines up with multiple other sources that have claimed Cupertino plans to launch a smaller, cheaper version of the iPhone next year.
If SE 2 goes on sale for $399 per unit, it would be $50 cheaper than the iPhone 8.
Apple Stock Price Action
Apple shares were down less than one percent to $226.60 at 8:07 a.m. in New York during pre-market trading. For the year, the name is up 1.32%, slightly outrperforming the S&P 500 which is up only 0.91%.
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