According to reports, the US investment bank Evercore ISI today estimated that Apple is expected to sell 35 million iPhone SE phones this year, which will generate an additional $15 billion to $20 billion in annual revenue for Apple.
Last week, Apple released a new generation of “economical” phones, the iPhone SE. It uses Apple’s A15 processor, supports 5G networks, and starts at $429. Many analysts believe that the next-generation iPhone SE will sell well, especially in developing countries.
We expect iPhone SE shipments to exceed 35 million units in its first year, Evercore ISI analyst Amit Daryanani said in a research note today. Based on about $450 (or higher) average selling prices, sales of this size would generate an additional $15 billion to $20 billion in annual revenue for Apple, equivalent to 4% to 5% of Apple’s annual revenue.
Dayana also said the iPhone SE would increase Apple’s EPS (earnings per share) by 25 cents to 30 cents a year, or about 4% to 5% of total annual earnings per share, based on standard product operating margins. To this end, Dayanani reiterated Apple’s stock “outperform” rating and set the price target at $210. On Friday, Apple shares closed at $154.73 per share.
The reason why Dayanani is optimistic about the new generation of iPhone SE is mainly based on three reasons. First, the starting price of the new iPhone SE, although 8% higher than the previous generation, is still affordable.
Second, the new generation of iPhone SE supports 5G networks and is also the first iPhone SE to support 5G. While this may not be a major selling point, it helps drive sales growth. In addition, more and more users (such as iPhone 8 users) need to upgrade their products.
Prior to this, investment bank Cowen also believed that the new generation of iPhone SE is still competitive in emerging markets such as China and India. Cowen analysts expect Apple to sell 28 million iPhone SEs in 2022. Analysts at Wedbush, another investment bank, expect Apple to sell 30 million iPhone SEs this year.
Jeff Fieldhack, an analyst at research firm Counterpoint Research, said that supporting 5G networks will help the iPhone SE open up new markets in Europe and Southeast Asia. In Europe and Southeast Asia, many consumers are waiting for 5G phones.