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Apple, Inc.'s Rumored New iPhone: What You Need to Know

By Daniel Sparks – Feb 26, 2016 at 3:00PM

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Here's why investors should care about the tech titan's upcoming event and the device that is expected to debut.

Apple (AAPL 1.68%) will hold an event on March 15, according to a range of different media outlets with reliable track records for Apple rumors. At the event, the company will unveil a new iPhone and iPad, as well as introduce more Apple Watch bands, according to 9to5Mac. With iPhones representing the lion's share of Apple's revenue and earnings, the potential of an early iPhone launch is arguably the most intriguing narrative for the rumored event -- at least to investors.

Here's everything there is to know about Apple's potential new iPhone.

iPhone 5s. The rumored new iPhone is expected to look similar to the iPhone 5s. Image source: Apple. 

Apple's new iPhone
Perhaps the most important thing for investors to know about the rumored iPhone is that it's not expected to be a flagship device. Instead, the new iPhone will reportedly aim to simply beef up its two-year-old iPhone -- the iPhone 5s -- with an improved version at the same price point.

Like the iPhone 5s, the new smartphone is expected to have a 4-inch display. This would be much smaller than Apple's current flagship lineup. The iPhone 6s and 6s Plus have display sizes of 4.7 and 5.5 inches, respectively.

iPhone 6. The iPhone 6 and 6s both have a 4.7-inch display. Image source: Apple.

Rumored to sport the name "iPhone 5se," with the "e" possibly standing for "enhanced," the latest rumors on the device suggest the new phone is "essentially the 2013 iPhone 5s with significant internal hardware and software upgrades," reports 9to5Mac's Mark Gurman -- a 9to5Mac author with a reliable track record with Apple rumors. This assertion differs from earlier rumors that the new phone would look like a smaller version of the iPhone 6 and 6s, which have more curved edges than the iPhone 5s.

The internals are reportedly significantly better than the iPhone 5s, with potential specs including the A9 and M9 chips from the iPhone 6s, an NFC chip for Apple Pay, the ability to take live photos, and 32 GB and 64 GB options instead of the 16 GB and 32 GB options for the iPhone 5s.

If rumors are correct, the device will have a starting price of $450 without a contract -- $200 less than the starting price for Apple's iPhone 6.

A March iPhone launch would be completely out of the ordinary for the tech giant. Typically, Apple introduces new iPhones once a year. And if Apple introduces a phone in March and keeps to its typical flagship iPhone announcement in September, this would mean two iPhone launches in the same year.

Even when Apple decided to introduce a lower-cost model -- the iPhone 5c -- priced below its flagship iPhone model, which was the iPhone 5s at the time, the company introduced both models simultaneously in the fall -- the same period Apple normally introduces its latest iPhones.

Why a new iPhone is important
But a mid-cycle iPhone launch makes sense after considering two reasons Apple might choose to do so.

First, Apple expects its second-quarter revenue to decline about 11% compared to the year-ago quarter, driven by an expected decline in iPhone sales as the iPhone 6s and 6s Plus have a tough time living up to the huge success of their predecessors. So, a mid-cycle iPhone launch could help beef up Apple's current lineup and potentially help it return to growth.

Second, priced lower than flagship phones, a revamped lower-cost iPhone could boost sales in fast-growing markets where price is more important -- markets like China and India.

While investors should keep in mind that reports of a smaller, mid-cycle iPhone are still only rumors at this point, it does make sense that Apple would launch the device.

Daniel Sparks owns shares of Apple. The Motley Fool owns shares of and recommends 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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