Apple May Only Sell a Few Million iPhone SEs in the U.S. This Year

The new iPhone SE may have been designed in California, but the four-inch phone is likely to have its biggest impact outside the U.S.

According to one market researcher, Apple is likely to sell only four million to six million units of the new iPhone SE in the U.S. in the first year. Those who own an iPhone 6 are unlikely to give up the big screen, reckons Consumer Intelligence Research Partners. Of the 110 million iPhones actively in use, CIRP estimates 18 million are of the iPhone 6s/6s Plus variety, while 62 million are from the iPhone 6 generation.

“A significant number of the 29 million consumers that currently own an older iPhone will also want to trade up to the larger phones,” CIRP partner Josh Lowitz said in a statement. Even those getting their first smartphone or moving from Android are most likely to go for a larger screen option, CIRP said.

Sure, all the major carriers will offer the $399 iPhone SE that Apple introduced yesterday. It’s just that U.S. customers tend to eschew the mid-market, instead opting to either pay for a premium phone or make do with a sub-$200 model.

Until recently, that trend was fueled by heavy subsidies on high-end phones in exchange for agreeing to a two-year contract. While contracts themselves have disappeared, customers are essentially doing the same thing and buying new phones in monthly installments. At $17 per month, the iPhone SE probably won’t feel like a big discount for most customers. With trade-ins and lease options, some customers may actually pay less to get a higher-end iPhone. Sprint, for example, is offering to lease a base model iPhone 6s for $13 per month with a trade-in of an eligible smartphone.

That’s not to say the iPhone SE won’t be a big deal. It just probably won’t be a big deal here.

The iPhone SE manages to pack some of Apple’s most modern features inside a smaller and more affordable package, something that could have great appeal in places like China and India as well as many mature markets outside the U.S.

Smartphone growth is fastest in places like India and Brazil. Although the iPhone SE doesn’t get Apple into the sub-$200 market, a lower-cost option gives wealthier folks in those countries an alternative to going with a refurbished or older model.

And not everyone is down on the SE’s prospects here at home.

“I’d expect a far higher percentage of those who have stuck with older phones to go with the iPhone SE rather than a 6 or 6s than last year, both because those people are likely to prefer to stick with smaller phones and spend less, and clearly don’t care about having the top of the line device,” said Jackdaw Research analyst Jan Dawson. “All of that favors iPhone SE sales. I don’t have a specific forecast for the iPhone SE but would guess it would sell a few million more than [CIRP’s estimate].”

CIRP

This article originally appeared on Recode.net.

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