New lower-cost 5G iPhone SE will be a key catalyst for Apple

The biggest announcement from Apple’s event this week that will likely be particularly impactful on the tech company’s near-term financial performance is the new 5G-capable iPhone SE.

The next-generation iPhone SE is a powerful new iPhone in an iconic design, featuring the A15 Bionic chip and 5G.
The next-generation iPhone SE is a powerful new iPhone in an iconic design, featuring the A15 Bionic chip and 5G.

Daniel Sparks for The Motley Fool:

Apple’s new iPhone SE is the company’s lowest-cost smartphone in its lineup, with a starting price of $429. Importantly, this price is far below the starting prices of its iPhone 13 Pro and iPhone 13 Pro Max at $999 and $1,099, respectively. Further, it’s still priced meaningfully below its mid-tier iPhone 13 mini and iPhone 13, which have starting prices of $699 and $799, respectively.

But even with its cheapest iPhone, the company is still able to flex some pricing power — an important trait in an inflationary environment. The predecessor to this iPhone SE, which was launched two years ago, was $399. The iPhone SE, therefore, is getting a price hike.

The new iPhone SE is good news for investors for several reasons. First, the company’s move to roll out a new iPhone model suggests that Apple is likely managing supply chain challenges well, if not better than expected… The more obvious reason investors should be upbeat about a new iPhone is that the smartphone segment still represents the lion’s share of the company’s revenue. In fiscal Q1, for instance, iPhone revenue was $71.6 billion, or 58% of revenue. By bringing to market a new iPhone in the summer, the company can help bolster the massive segment in a way that contributes meaningfully to earnings per share.

MacDailyNews Take: Apple is set up to deliver better-than-expected results in fiscal Q222 due at the end of April where investors will also find out what the company’s dividend payout will be for the next 4 quarters along with any increase to the existing share repurchase program.

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2 Comments

  1. It may be “lower-cost,” but it’s also the best looking iPhone in lineup. Sleek and efficient, not big and bumpy. When potential first-time iPhone customers picture themselves holding and using an iPhone (with ONE hand), it looks like iPhone SE.

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