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Report: No Apple Inc. iPhone SE Refresh in the First Half of 2018

Ashraf Eassa, The Motley Fool

For quite some time, there have been rumors floating around about the planned introduction of a successor to Apple's (NASDAQ: AAPL) entry-level iPhone, the iPhone SE, in the first half of 2018. 

The current iPhone SE is nearly two years old, an eternity in the smartphone market. Speculation about an upgraded version at some point around mid-2018, therefore, seemed credible. 

The front, side, and back of a rose-gold iPhone SE.

Image source: Apple.

However, according to a new report, from Economic Daily News (via MacRumors), Apple has no plans to launch any new iPhone models in the first half of 2018, contradicting previous reports and validating KGI Securities analyst Ming-Chi Kuo's skepticism that such a device was in the pipeline. 

Here's what this means for Apple's business. 

No mid-cycle bump

The primary effect of the introduction of an upgraded iPhone SE would've been a slight boost in iPhone unit shipments and revenue during the second half of the company's current fiscal year. There would've likely been a corresponding decline in average selling prices as shipments of those devices grew, though, since the iPhone SE line tends to sell for well below typical iPhone average selling prices. 

Ultimately, not refreshing the iPhone SE in the first half (or, frankly, during 2018 at all) just isn't a big deal for Apple or its stock. The reports of the premium-priced iPhone X selling in quantities significantly below the company's original expectations are far more concerning -- and even that doesn't appear to have put a lid on Apple's stock price, which is currently trading near all-time highs.

When do we get a new iPhone SE, then?

Given that Apple has a very busy fall, with rumors and reports pointing to the launch of a trio of new iPhone models in September, I think it's unlikely that we will see a new iPhone SE at any point this year if it doesn't come in the first half.

If Apple does intend to upgrade the iPhone SE but fails to do so this year, I could see an upgraded model brought out sometime during the first half of 2019. Such a device could further accelerate what could already be strong iPhone growth during the upcoming product cycle by enabling Apple to more effectively capture market share at lower price points and in more cost-sensitive regions. 

While the iPhone SE is an important product line that should be updated from time to time, the sense I get is that Apple doesn't feel that it's critical to update it frequently or even regularly.

Part of that is probably because the iPhone SE was incredibly powerful at launch and is still a very capable device today, but another reason may simply be that the iPhone SE doesn't make up enough of Apple's shipment volumes to be worth the resources required to update it at anything more than a snail's pace. 

Ultimately, Apple's attention is focused on trying to build more compelling high-end products to convince customers to buy higher-end devices in its product stack, not in striving to make its lower-cost and far less profitable devices more interesting. Apple dragging its feet on an iPhone SE refresh would just be further evidence of that. 

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Ashraf Eassa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.