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Back to the future: why Apple releases a 4 inch iPhone

21 March, Apple will introduce a new 4-inch iPhone. Apple hopes to spur sales of smartphones, which are hampered by the high cost of flagship devices and the attachment of users to the iPhone 5s.

On Monday Apple will hold a presentation of new products in the headquarters of the company in Cupertino. Investment analysts and specialized media expect a major hit of the event with the slogan “Let us loop you in” will be a 4-inch iPhone, which will be called the iPhone SE (special edition — “special edition”) and will become a peculiar step for Apple ago line of smartphones from the previous generation includes a 4.7 – and 5.5-inch devices, and the design and dimensions of iPhone SE more like an iPhone 5s, went on sale in 2013.

Why the iPhone maker decided to step back and update the model range of the previous generation of smartphones?

That during the March presentation will not show the Apple iPhone 7, it was clear almost immediately — the next generation of its smartphones, the company traditionally represents autumn. However, from January 2016, the network has spread rumors that in March the Corporation will demonstrate a new mobile device, but it will not be the next flagship and its smaller version with the once-familiar 4-inch display.

Shortly before the presentation, 21 March, Apple announced results for the first quarter of 2016 financial year (the three months from October to December 2015). During this period, the company achieved a new record among public companies on quarterly earnings, which reached $18.4 billion on revenue of $75,9 billion But within three months Apple sold 74.8 million iPhone — only 0.4% more than in the same period of the previous fiscal year. For Apple this is the slowest rate of growth in sales of smartphones with 2013, while this was the first full quarter of sales of new models of the iPhone 6s and iPhone 6s Plus.

Top “filling” and compact body

SE iPhone will resemble the iPhone 5s is not only the size of the screen — the design of the device, according to insiders, also almost identical to the previous 4-inch model from Apple. The only expected update — metal frame: its shape will become slightly less sharp, and shiny color will be “muted” in favor of matte. Housing will remain a 3.5-millimeter audio Jack that Apple is rumored ready to remove from the design of the iPhone 7 in favor of wireless headphones.

From a technical point of view iPhone SE will serve as a bridge between the iPhone 6 and iPhone 6s. According to sources, the device will receive the latest generation of processors A9 and M9, for example, that would allow the voice assistant Siri to hear the user command in the background. The size of the matrix main camera will increase to 12 megapixels. It is expected that the smartphone will come in versions 16 GB and 64 GB of memory and will get the NFC chip payment system Apple Pay.

The rumors around the iPhone battery SE agree on one thing: it will be more than the machines of the fifth generation. Its capacity will be either 1624, 1642, or milliampere-hours — here, the data sources differ. However, given the more powerful hardware, count on a significant increase in battery life.

IPhone 5s from “special version” will get the fingerprint scanner Touch ID. Some functions will pass to the SE and from the leaders of the sixth generation smartphone — the iPhone 6s and 6s Plus: the ability to shoot high-quality 4K videos and “live photos”. Filling the new feature will match the iPhone 6s is talk about the processor and camera. Finally, iPhone SE will be presented in the same colors smoke — silver, gray, gold and “rose gold”.

To spur sales

Smartphones remain the main commercial driver for Apple over the last quarter the device brought the company 72% of revenues. The problem is that many iPhone owners are in no hurry to buy new items, which have more powerful features, are nearly always more expensive than the previous generation of gadgets.

According to Apple, more than half of iPhone owners by the beginning of 2016 is not updated on the model of the sixth generation. In September 2015, the company even launched in the U.S. a special program “upgrade” of iPhone users had the opportunity to buy a smartphone in installments and once a year to exchange them for more advanced (though, together with the exchange of installment payments is reset to zero and start from scratch). But, by calculations of analysts of Bank UBS, which results in RBC, in 2016 iPhone sales will fall for the first time in eight years — c 231,2 million to 218,8 million devices.

According to the Agency, after 18 months after the release of the sixth-generation iPhone (6, 6 Plus, 6S, 6S Plus) only 40% of owners of older models have updated gadgets. That is about 60% of iPhone owners use smartphones, released in 2013 and before. And the problem of “stagnation” of the model range is relevant not only for developing countries: according to research firm Kantar Worldpanel, at least 55% of iPhone used in the USA, over 2.5 years.

Available iPhone

Return to 4-inch casing will allow Apple to reduce the cost of the new device and to spur sales in the mid-cycle refresh of the flagship models. According to estimates by investment firm KGI Securities, the price of the SE model in the U.S. will be about $400-500. For comparison, the minimum equipment iPhone 6s is on sale right now for $650. In Russia SE or iPhone will be sold at the price of the iPhone 5s — that is, 37 000, or the price of the iPhone 6 — from 45 000 rubles. Consumers will be offered versions with 16, 64 and 128 GB of internal storage.

A more affordable model will allow Apple not only to motivate users to update devices, but also strengthen the position of producers in the rapidly growing markets of Asia and Latin America, where the company still loses more budget competitors. There is a huge potential and India, where Apple sales have been growing rapidly: in 2015, 76% (to 1.7 million smartphones).

Sale “new old” device could bring Apple an additional $5.5 billion in 2016 fiscal year and additional sales in the amount of up to 10 million units, analysts predict RBC Capital Markets. According to them, SE with iPhone, the company will bet on India, and the second category of potential buyers of the new model will be the current owners of iPhone 4s, iPhone 5 and iPhone 5s.

Analyst firm Piper Jaffray gene Munster suggests that the yield of the SE models will also allow Apple to lower the price of the iPhone 5s with the current minimum of $372 (U.S.) to $250-350. However, according to sources, the release of the iPhone 5s, the iPhone SE can cease.

The replacement of the “fives”

Apple began selling smartphones in 2007. Since then, the company has already completed around 900 million smartphones, of which a significant share of the market is the iPhone 5s, the replacement of which may become new 4-inch smartphone.

The most popular model from Apple is the iPhone 6 released in 2014: accounting for 34.5% of all used in the iPhone world, according to the research firm Mixpanel. iPhone 5s — on the second place in popularity. Despite the fact that since its announcement the company has released two generations “sixth” iPhone, latest in the lineup of the “top five” accounted for 17.5% of all types of smartphones Apple.

Mixpanel’s data also confirmed a September study by Localytics analysts: according to the company, the iPhone 6 accounts for 30% of all used devices, in second place — iPhone 5s with 23.7%.

In Russia, the 5s is also one of the most popular models of the iPhone, said the representatives of “Megaphone” (in the operator’s network more than 1 million owners 5S) and MTS. Subscribers of “Beeline” are more common earlier models — iPhone 4 and iPhone 4s, and the iPhone 5s takes third place in popularity. In the sales of Russian retailers among all iPhone also iPhone 5s lead, according to the “Euroset” throughout the market during 2015 and the information Beeline for his salons for February 2016.

See also:

  • What will Apple presentation on March 21
  • The latest Apple news that’s not worth waiting for the presentation on 21 March
  • Unlocking the secret characters in the invitation Apple

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