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3 Features Apple Inc. May Bring to the Next-Gen iPhone SE

By Ashraf Eassa – Nov 8, 2016 at 1:00PM

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This Fool thinks that Apple's next generation small, low-cost smartphone could include a number of features carried over from this year's flagship iPhone models.

According to KGI Securities analyst Ming-Chi Kuo, by way of MacRumors, Apple (AAPL 0.83%) isn’t planning to release an updated version of the iPhone SE during the first half of its fiscal year 2017. The success of the iPhone SE line, though, practically guarantees that the company will release an improved version of the phone at some point. 

Image source: Apple. 

Let's go over three features that I expect to be present in a future iteration of the iPhone SE.

3D Touch

Every iPhone model Apple sells today, aside from the iPhone SE, comes equipped with 3D Touch. The SE didn't get the technology probably because Apple wanted to give customers a reason to buy more expensive phones, and because 3D Touch probably adds significant cost.

But by the time Apple gets ready to mass-produce and sell an updated iPhone SE, 3D Touch will no longer be a major point of differentiation within the iPhone product stack. Instead, it will probably be a “must-have” feature for any new iOS device sold. Manufacturing costs for the technology will also probably come down as manufacturing yields improve.

When Apple refreshes the iPhone SE, the inclusion of 3D Touch is a must.

New display

For a while now, Apple has been transitioning to displays that can render a wider color gamut. Apple’s iMac and MacBook Pro computers, 9.7-inch iPad Pro, and iPhone 7-series smartphones all include displays capable of rendering the DCI-P3 color space, which Apple says is 25% larger than the traditional sRGB color space that Apple’s devices have previously been limited to.

The next iPhone SE should include a wide-color display. If it does, it's also likely to include many of the other display quality enhancements that Apple introduced with the iPhone 6- and 7-series devices, including improved viewing angles, greater contrast ratio, and more.

A new display would also probably dramatically improve the delivered user experience relative to the current iPhone SE model, potentially helping to spur demand.

Improved camera

One of the nice things about the iPhone 7 is that it not only includes a wide-color display, but it also has cameras capable of capturing images in wide color. Should the next iPhone include a new wide-color display, Apple should also update the iSight and front-facing cameras to be able to capture images in wide color.

Doing so would be easy for Apple, which could recycle the sensors inside the front-facing and rear-facing camera from the iPhone 7 in the future iPhone SE.

Apple may be able to include optical image stabilization, though it’s not clear if Apple would need to make modifications to the iPhone SE’s shell to accommodate that technology. 

When should investors expect the new iPhone SE?

If Kuo is correct that an updated iPhone SE won’t arrive anytime soon, it might make sense for Apple to simply hold off until March 2018 to release such a product. The current iPhone SE is still a credible smartphone that offers strong performance and features for the price, and it’s likely to remain so over the next year.

Looking at it from another angle, right now there seems to be a popular view that fiscal year 2017 is something of a transition year for Apple ahead of what's expected to be an iPhone 8 "super-cycle" in fiscal year 2018.

By saving an updated iPhone SE for fiscal year 2018, Apple could be better positioning itself for nice year-over-year iPhone revenue and unit growth comparisons.

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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