The KGI Securities analyst, Ming-Chi Kuo, is at it yet again. He has a reputation as one of the best Apple analysts out there considering that most of his prior predictions have come true. His latest reveal is that Apple has done numerous cancellation of iPhone 7, an upgrade of its successful iPhone series.
In his leak, Ming says that Apple has opted to stop upgrading its iPhone SE in 2017. The company’s 4-inch budget smartphone has been critical in bringing dollars to the firm and many have argued that it is better buying it as opposed to the iPhone 7.
Now, what may have made Apple to take this action that obviously hurts it financially? Kuo has a number of suggestions for this:
- To combat cannibalization that a 2017 iPhone SE may have had on the profits brought by the iPhone 7
- To widen up the 2016 iPhone SE margin as its older components continue to decline price-wise
We are all aware that the interest that Apple has is more on profit share and not market share. Thus, these financial decisions may as well be sensible. Considering the state of the iPhone 7 sales, it would hurt the company in terms of PR after information comes out the iPhone 7 failed because customers preferred the budget model.
On the other hand, Kuo feels that cancelling the iPhone Se update will impact raw sales figures.
iPhone shipments to decline
Among the things that Kuo says will happen is that iPhone shipments will go down by 10 percent in 2017 second quarter. He says that the figures will be about 35million, as opposed to 40.4million in 2016 second quarter. He says the 2016 quarter was lucky to have an upbeat in iPhone SE demand which saved it.
This is not the first time that Apple is making such a decision. The company has in the past avoided upgrading MacBook Pro and iPad generations when the existing models were deemed to still give better results. But is the first time the company is skipping upgrading an iPhone.