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Apple (AAPL-0.53%) is releasing a new product on Wednesday — and it could be a new version of its lower-cost iPhone.
Apple chief executive Tim Cook last week teased a launch for “the newest member of the family” — which some are speculating to be an updated iPhone SE. Apple introduced the smaller iPhone model in 2016, and released a 5G version of it in 2022.
The new version of the iPhone SE is expected to use the same A18 chip that is in the iPhone 16, have a full-screen OLED display, and include Apple Intelligence capabilities, according to reports by Bloomberg and other news outlets. The model, which is the only iPhone without Face ID, will reportedly lose its home button and look similar to the iPhone 14.
Earlier this month, Bloomberg reported that iPhone SE, 14, and 14 Pro inventory at Apple stores was running low — possible signs that an upgrade is coming.
Apple did not immediately respond to a request for comment.
In January, analysts at Jefferies (JEF-0.22%) downgraded Apple stock to “Underperform,” citing concerns including “limited traction” for the rumored iPhone. While the new iPhone SE is expected to have one rear camera, the older iPhone 13 Pro and 14 Pro both have three cameras. That could make them more attractive options — especially if they have a lower price tag — despite the iPhone SE’s artificial intelligence features, Jefferies said.
An iPhone SE currently starts at $429 — hundreds of dollars less than the iPhone 16, which starts at $799.
Meanwhile, Apple is partnering with Chinese firm Alibaba (BABA+1.44%) to support its rollout of Apple Intelligence in the country. The collaboration could help the iPhone maker gain back smartphone market share in China, which it has lost to local competitors including Huawei and Vivo.
“They talked to a number of companies in China. In the end they chose to do business with us,” Alibaba Group chairman Joe Tsai said at the World Government Summit in Dubai, according to Reuters. “They want to use our AI to power their phones. We feel extremely honored to do business with a great company like Apple.”
Despite being the company’s “best quarter ever,” Apple missed iPhone revenue expectations for the first fiscal quarter. The tech giant reported $69.1 billion in net sales for the iPhone, while analysts had expected $70.7 billion, according to FactSet (FDS+0.52%). The company’s greater China revenue for the first quarter was down by 11% year over year.
On the company’s earnings call, Cook noted that Apple had better results in markets where it has rolled out Apple Intelligence compared to markets that don’t yet have the AI features.