Per a new report from Apple (NASDAQ: AAPL)-centric website Macotakara (via MacRumors), Apple is prepping a couple of "new" iPhone models. The first is a variant of the company's relatively low-cost, small-screen iPhone SE with 128 gigabytes of storage (current models come with either 16 or 64 gigabytes of storage).
Continue Reading Below
Additionally, Apple is reportedly planning to add new red variants of both the iPhone 7 and iPhone 7 Plus to its lineup.
Image source: Apple.
Let's take a closer look at what these new products could potentially do for the company's iPhone business.
The new iPhone SE could help boost blended average selling prices... or unit shipments
On Apple's April 2016 earnings call, company CEO Tim Cook explained that the iPhone SE "is attracting two types of customers."
Continue Reading Below
The first set, he explained, are "customers that wanted the latest technology but wanted it in a more compact package."
"We clearly see even more people than we thought in that category," Cook added.
The second set of potential iPhone SE customers, per Cook, were individuals "who aspire to own an iPhone but couldn't quite stretch to the entry price of the iPhone, and we've established a new entry [with the iPhone SE]."
The iPhone SE with 16 gigabytes of storage currently sells for $399, with the 64-gigabyte version coming in at $449; the iPhone 6s with 32 gigabytes of storage sells for $549.
With this rumored 128-gigabyte iPhone SE, Apple has two potential ways to try to boost revenue.
The first is that it can simply ax the 16-gigabyte iPhone SE model and offer the 64-gigabyte version at the $399 price point and the 128-gigabyte variant at the $449 price point that the 64-gigabyte version currently occupies.
That course of action has the potential to reduce blended average selling prices (perhaps as mix shifts down to the $399 64-gigabyte version), but it could also boost overall unit demand as value-oriented customers may be more inclined to grab an iPhone.
Alternatively, Apple could simply add the 128-gigabyte iPhone SE to the current lineup and charge, perhaps $549 for it. This might not stimulate a lot more unit demand, but it could have the effect of getting the portion of the iPhone SE-buying population that is buying the iPhone SE for form factor and not for cost reasons to buy a richer mix of products, helping to boost blended average selling prices.
It'll be interesting to see what Apple's ultimate go-to-market strategy will be for this product -- assuming it's real.
iPhone 7 and iPhone 7 Plus in rouge
Apple has been steadily adding new color choices to its iPhone lineup over the years. In 2013, Apple introduced gold, in 2015 we got rose gold, and in 2016 we got black and jet black. It's looking as though we're getting red this year.
It's not clear how much impact bringing red color models into the lineup will have on overall sales; after all, are there truly potential customers out there that haven't purchased a new iPhone but totally would have purchased an iPhone if only it had come in red?
For what it's worth, in a poll run by 9to5Mac, 106 voters out of a total of 15,558 said that they were most excited about a red option coming to the iPhone 8 -- losing to all other potential options except for "speed improvements."
We'll see if the introduction of red iPhone 7 and iPhone 7 Plus has any real impact on iPhone sales soon enough, if this rumor turns out to be true.
10 stocks we like better than Apple
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Apple wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of February 6, 2017
Ashraf Eassa has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. The Motley Fool has a disclosure policy.