Apple Inc. shares are recovering nicely after what has been a difficult year based on the troubling iPhone 6s cycle. After this week’s gains, the stock is down by less than 4% year to date as investors look ahead to the rumored March event, at which the company is expected to unveil a new 4-inch iPhone that’s being referred to as the iPhone SE.

March quarter to be the trough in iPhone sales

In a report dated March 2, Sterne Agee CRT analysts Rob Cihra and Edison Yu noted that usually the March quarter represents the trough in iPhone sales, which is welcome news for investors as they strain to look past the iPhone 6s cycle and its disappointing sales. They expect Apple to sell 58 million iPhones during the March quarter, although that number is still up against a difficult iPhone 6 comparison.

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iPhone SE expected this month

We’ve heard a plethora of rumors about the iPhone SE, which Apple is expected to unveil at a yet-to-be announced event later this month. As the rumored date of the event nears, we’re hearing more and more details about the new 4-inch iPhone. The Sterne Agee CRT team believes that the iPhone SE will replace the iPhone 5s and be priced at around $450, although other sources have said recently that Apple will keep the iPhone 5s but cut its price below that of the iPhone SE.

Cihra and Yu expect the iPhone SE to look much like the iPhone 5s except with a slightly curved display similar to that of the iPhone 6. Under the hood, they expect a newer A9 chip and near field communication to support Apple Pay.

iPhone SE to boost Apple’s June quarter sales

The rumored specs about the 4-inch iPhone suggest that it won’t have a Touch ID fingerprint scanner, however, which would make it a bit strange for Apple’s least expensive iPhone to have a Touch ID scanner but its mid-range handset not to have one. At any rate, the Sterne Agee CRT team says the iPhone SE should cushion the blow that the June quarter’s earnings report will likely bring.

They expect the 4-inch iPhone to make up only 7% of the total product mix for the quarter, although they add that this is “nonetheless an atypical Q/Q cushion that should help narrow total iPhone declines to <10%Y/Y from the Mar-qtr’s>20%Y/Y.”

Eventually, they expect the iPhone SE to grow to be 17% of total iPhone units in calendar year 2016 from about 14% last year.

Strong setup for iPhone 7

Wall Street generally expects the iPhone 7 to help Apple recover in a big way, so many analysts are just skimming over the next couple of quarters in preparation for what should be a return to iPhone unit growth.

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It’s expected that the next flagship will be released in September as past models have been. Most rumors suggest that the iPhone 7 lineup will have the same dimensions as the iPhone 6s and 6s Plus but be thinner.

For example, we’ve heard several times now that Apple is planning to ditch the 3.5mm earphone jack and replace it with a Lightning port instead. Other reports suggest that the rear camera will be made flush with the back of the device.

The Sterne Agee CRT team thinks there’s still some channel inventory that must be burned off, possibly about another million units quarter over quarter for the March quarter. They have a Buy rating and $145 per share price target on Apple stock.