avatarby Dan BartramNovember 5, 20160 comments


For those waiting for an iPhone SE refresh next year may be kept waiting as notorious analyst Ming-Chi Kuo from KGI Securities predicts the device will not be refreshed in 2017.

Kuo predicts that iPhone sales will drop in the first quarter of 2017 due to the slow post-holiday period. This could be down to Apple not taking the opportunity to refresh the iPhone SE.

A note was issued to investors on Friday by the analyst highlighting the pressure Apple are putting on its suppliers to reduce their prices. Reducing the cost of the parts that make an iPhone will help Apple maintain its high profit margins while maintaining the same quality.

This demand comes as Apple revealed on a recent conference call with analysts that Apple provided lower-than-expected gross margin guidance between 38 percent and 38.5 percent for the holiday quarter. That’s versus a Wall Street expectation of at least 39 percent.

The reason behind Apple not refreshing the iPhone SE next year is down to trying to keep focus entirely on the iPhone 7, according to Kuo. The reasoning is interesting, since the iPhone SE is supposed to represent the latest hardware in an affordable package, so targets a complete different audience any way.

“Total BOM costs for the iPhone 7 are more in line with what we have seen in teardowns of recent flagship phones from Apple’s main competitor, Samsung, in that the costs are higher than in previous iPhone teardown analyses,” said IHS’s Andrew Rassweiler.

“All other things being equal, Apple still makes more margin from hardware than Samsung, but materials costs are higher than in the past.”

This comes as the 32GB iPhone 7 model is estimated to cost around $219.80 per device in materials.

Despite Kuo predicting Apple may not refresh the iPhone SE next year, he doesn’t rule out a refresh later in the year of 2017.

Also, even though Apple are looking to reduce its supply costs, it may not have much luck with Samsung according to Kuo. Samsung has bargaining power to perhaps even raise prices warns Kuo, and switching supplier to TSMC may not work either since the production capacity is already pre-booked, meaning Apple wouldn’t be able to yield the numbers it needs.

3GB DRAM and 3D NAND flash “will likely remain in short supply in the holiday quarter, and Samsung is unlikely to surrender to the pressure and may even raise its product prices,” says Kuo.

Kuo forecasts that Apple will achieve iPhone shipment volumes of 40 million to 50 million units for the current quarter, down year-over-year from 51.2 million units. Kuo attributes this A weaker demand for 4.7-inch iPhones and also weakening demand in China. Looking ahead, he estimates total iPhone shipment volume to reach 35 million to 40 million units in the second quarter of 2017, down from 40.4 million units at the same time last year.

Drop us a comment below if you’re awaiting an iPhone SE refresh? Does this new change what device you may pick up next?

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