Apple released a new smartphone last week, and as with just about every smartphone it releases, the device is so popular that the company hasn’t been able to manufacture enough of them. Known as the iPhone SE, there isn’t anything special about this smartphone aside from the fact that it’s slightly cheaper and slightly smaller than the regular iPhone, but that isn’t stopping it from flying off the shelves, and an RBC Capital Markets analyst by the name of Amit Daryanani is saying that Apple will likely sell 40 million of the 4-inch iPhones this year.
Since it launched just over a week ago, the iPhone SE has seen demand outstrip supply, indicating to one investment firm that the new budget-priced 4-inch handset could offer some upside to shareholders. Analyst Amit Daryanani of RBC Capital Markets issued a note to investors on Friday, a copy of which was provided to AppleInsider, in which he said shortages of the iPhone SE both in stores and online bode well for Apple. In his view, Apple is likely to sell more than 40 million 4-inch iPhones in 2016. And while some of those will cannibalize sales that would have otherwise went to larger handsets, Daryanani believes the iPhone SE will drive 15 million more incremental iPhone sales for Apple this year. With a bill of materials estimated at around $260, and a starting price of $399 for the 16-gigabyte model, Daryanani believes Apple will achieve gross margins around 35 percent with the iPhone SE. That’s much lower than margins for the iPhone 5s and iPhone 6s, which were believed to be in the mid-40-percent range. Nonetheless, he estimates that the iPhone SE could drive $6.8 billion in revenue and 23 cents in earnings per share for Apple in calendar year 2016. His estimates assume an average selling price of $450, factoring in the $499 64-gigabyte capacity.