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Since Apple launched its first iPhone in 2007, cell phones were growing in size. CEO Tim Cook will reverse this trend on Monday, when presenting a smaller iPhone, trying to convince reluctant consumers to buy a new smartphone even do not want a larger device.
The ambitions for the new phone can be compared to their diminutive size. Unlike previous versions of the new device, the iPhone 4 inches will not come packed with technological innovations designed to make Apple fans queuing crowds form giving around the block to buy it on launch day. Instead, the device was designed to attract those who are still clinging to the 5S or 5C, launched more than two years, the latest models with more compact screen.
“The new device, in fact, only replace the 5S at the lower limit of the line models,” said Chris Caso, an analyst at Susquehanna International Group in New York, which maintains a positive rating for Apple’s stock. “The 5S is getting a bit old now and not run the operating system as well for a long time.”
The company will launch the new phone two months after reporting that quarterly earnings will probably fall for the first time in more than a decade, highlighting the fear that the iPhone growth has reached its limit. Analysts at UBS and RBC Capital Markets predicted that the SE iPhone sales – expected name of the new model – will total about 15 million units per year, but its smaller size and lower price could encourage an increase in the number customer at a time of year when many sales sometimes lose strength. Apple has sold more than 231 million iPhones in 2015, with a fall between April and September, as in previous years.
Although the event is focused on new products, Apple followers will be able to pay more attention to anything that Cook says about the legal battle between the company and the US government because of a request for the manufacturer help the FBI to unlock the iPhone a terrorist. After more than a month of disputes – in court documents, in congressional hearings and TV – the two sides present their arguments on Tuesday a judge in Riverside, California. Cook can use the stage on Monday, the company’s headquarters in Cupertino, California, to reiterate Apple’s argument that create software to degrade phone security features will inevitably endanger the hundreds of privacy million users.
Deceleration updates
The company is launching the new smaller iPhone at a time when customers are keeping their devices for longer. Cell phone carriers like AT & T and Verizon Wireless are no longer subsidizing new iPhone purchases as before, making customers question whether the improvements justify spending on new models. The slowdown of the update cycle is something that Apple experienced with the iPad, which has suffered a steady decline in sales for several quarters.
“The replacement cycle of iPhones increased to 27 months,” against 23 months two years ago, wrote analyst Amit Daryanani, RBC, in a note to clients this week. The new device will “ensure that consumers have a 5S or 5C for three years do not change for Android because of the lack of new iPhones.”
The owner of an older iPhone that are looking to upgrade your phone can currently spend $ 549 in the basic version of the iPhone 6 – Edition 2014 – or buy a cheap phone with Android system. The new low-cost model of Apple can convince customers to continue purchasing brand products, allowing the company to sell services through the App Store or products based on signatures such as the Apple Music and iCloud.
The new smartphone will have a faster processor than the 5S, according to a person with knowledge of the details. As with the iPhone 5C, it will be available in several colors, according to analysts.