In early 2016, Apple (NASDAQ:AAPL) released a new smartphone called the iPhone SE. The device was unique because it took many of Apple's then-latest technologies and stuffed them into what was effectively the casing of the iPhone 5s -- the company's flagship introduced in the fall of 2013. 

The phone was intended to cater to more price-sensitive customers looking for a high-quality smartphone as well as iPhone enthusiasts who wanted the latest iPhone technology in a compact device. 

Apple's 10.5-inch iPad Pro on the left and its iPhone 7 on the right.

Image source: Apple.

iPhone SE was arguably a successful product in this regard, and the company is rumored to be planning to launch a successor to the iPhone SE in the first half of 2018. 

Here's one thing that I think Apple absolutely needs to introduce with the rumored iPhone SE. 

A much higher-quality display

Publication Tekz24 says that the upcoming upgraded iPhone SE will have a display that measures between 4 inches and 4.2 inches along the diagonal. The current iPhone SE has a display that measures 4 inches along the diagonal, so the updated iPhone SE could have a similar display to the one on the current iPhone SE or only slightly larger. 

That being said, I don't think the size of the display is going to be the most important aspect of the display used in the upcoming device. Instead, I think Apple will need to focus on dramatically improving the quality of the display used in the new iPhone SE. 

The display that Apple includes in the current iPhone SE is the same display that shipped with the iPhone 5. Nearly six years ago, it was a best-in-class mobile display, but today it's horribly outdated. Many low-cost Android-based smartphones ship with objectively better displays at this point. 

The next iPhone SE needs a significantly upgraded display. 

How Apple can upgrade the display

I don't expect Apple to outfit the new iPhone SE with an ultra-advanced organic light-emitting diode (OLED) display like the one found on the iPhone X, but what the company can do is effectively bring the same display technology that's used in today's iPhone 7 to the updated iPhone SE. 

Simply upgrading the iPhone SE to iPhone 7-class display would lead to a dramatic boost in image quality. Contrast ratio would roughly double (higher is better), and the display would gain the ability to show more saturated colors. Additionally, such a display would likely be significantly brighter than the one found on the current iPhone SE. 

Apple's iPhones in a mosaic pattern.

Image source: Apple.

If Apple wants bonus points, it can also add its True Tone display technology (this changes the color temperature of the display based on the color temperature of the surrounding light) to the new iPhone SE, but I think this is unlikely for one simple reason: The iPhone 7 and iPhone 7 Plus don't incorporate the feature. 

Apple needs to avoid giving an updated iPhone SE any features that the iPhone 7 and iPhone 7 Plus (devices that Apple will likely continue to sell for nearly two more years) don't have, so True Tone is probably out. This is also (not-so-coincidentally) why I think it makes sense that the rumors are that the new iPhone SE will use the A10 Fusion applications processor (the same one that's used in the iPhone 7 and iPhone 7 Plus) instead of the A11 Bionic that's inside of the iPhone 8 and iPhone 8 Plus. 

Impact on Apple's business

Ultimately, if Apple can bring a great user experience to its lower-priced iPhones, it should be able to capture market share in high-growth but price-sensitive markets like India. An updated iPhone SE with new internals and a brighter, more vibrant display could be just the product that Apple needs to win in those markets. 

Ashraf Eassa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.