Cowen analyst reveals Apple’s big plans for iPhone SE 2 aka iPhone 9

2020 is going to be another crucial year for Apple. Even as the company is making progress in the services business, its hardware, primarily driven by iPhones, is going to play a big role. This year, Apple is widely rumoured to launch a cheaper iPhone, dubbed as iPhone 9 aka iPhone SE in the first half of the year. The phone is likely to help Apple's regained momentum in the smartphone business.

According to Krish Sankar, a noted analyst at Cowen, Apple will produce at least six million units of iPhone SE 2 aka iPhone 9 between January 1 and March 31. He adds the iPhone SE 2 aka iPhone 9 will be priced around $475 ( ₹33,880 approximately) and may contribute to 12% of iPhone production in the second quarter of the year.

Sankar's comments are in the line with the recent reports that Apple is going to begin mass production of the cheaper iPhone in February. Reports suggest Apple iPhone 9 aka iPhone SE could be launched by the end of the next month. Availability is likely to follow soon in March.

"Warm reception for the iPhone 11 & bullish investor sentiment on the smartphone market has led to expectations for iPhone unit Y/Y growth in CY20 especially with the SE2 (despite some cannibalization) and 5G product cycles," Sankar is quoted as saying.

"Services revenue growth is expected to remain robust with generally stable gross margins (60%+) as rising subs revenues (est. 51% of Services by FY21 vs 44% in FY19) drive multiple expansion," he added.

Sankar disclosed that Apple produced 70 million units of iPhones for the holiday quarter. About 52 million, roughly 74%, of the total production was for the iPhone 11 and iPhone 11 Pro. He predicted Apple will produce about 43 million iPhone units in the second quarter of this year. This suggests iPhone 11 and iPhone 11 Pro models will still dominate the production.

Apple iPhone SE 2 aka iPhone 9 comes at a time when smartphone companies are aggressively chasing the entry-level premium smartphone market. While Samsung is experimenting with Galaxy S10 Lite and Note 10 Lite, Apple has tasted success with more affordable iPhone 11. In fact, its 2018 iPhone XR is still dominating its sales in India. An affordable Apple iPhone SE 2 could further help the company strengthen its position in the segment.