Technology

iPhone 5se To Add $5.5B To Apple’s 2016 Revenue: Analyst

Apple is all set to unveil a 4-inch smartphone called iPhone 5se (Special Edition) next month. The Cupertino company has reportedly roped in a second supplier, Wistron, to make the iPhone 5se. Foxconn will remain the primary supplier of the new phones. The new smartphone is said to hit the store shelves on March 18, just three days after official unveiling.

iPhone 5se To Add $5.5B To Apple's 2016 Revenue: Analyst

iPhone 5se to have an ASP of $550

RBC Capital Markets analyst Amit Daryanani said in a research note to investors that the 4-inch iPhone could add $5.5 billion to Apple’s 2016 revenue. Daryanani has an Outperform rating on the stock with $130 price objective. The analyst estimates that the iPhone 5se will sell more than 10 million units during the current fiscal year. But it will eat into some of the sales of larger iPhone models. So, the net tally would be 10 million units in additional sales.

At the average selling point of $550, the iPhone 5se would add $5.5 billion to Apple’s revenue. The analyst estimates that it would add 23 cents to Apple’s earnings per share, or 2% of its FY2016 total. RBC Capital Markets says this phone is for people still using the iPhone 5S or 5C. It could drive upgrades from users of three-plus years old iPhones. Apple would produce about 20 million units of the iPhone 5se in 2016, says Daryanani.

iPhone 5se could rev-up demand in India

Daryanani believes the iPhone 5se could rev-up demand in developing countries like India, which Tim Cook recently cited as a bright spot for the company. India is the world’s fastest growing smartphone market, but Apple has only 2% market share because customers prefer budget phones from Samsung, Micromax and other local vendors. Earlier this week, Apple discontinued the iPhone 4S and iPhone 5C in India, positioning the iPhone 5S as its entry-level model in the country.

The iPhone 5se is said to have a metal-backed design similar to the iPhone 6S, with A9 processor and support for Apple Pay. The phone will be unveiled on March 15 alongside the iPad Air 3 and Apple Watch 2.