No more 4-inch iPhones for Apple, says analyst

Apple may have revamped its iPhones with the latest iPhone 7 series, but it has also taken a decision that may hurt some of its earliest users.

One of the most prominent and trusted analysts from KGI Securities Ming-Chi Kuo said Apple has reportedly decided not to refresh its 4-inch iPhone lineup next year, making the iPhone SE the last 4-inch model to date.

Kuo's prediction is that Apple's sales in the first and second quarters of 2017 will continue to decline due to its decision. But the company has been expected to bring the biggest change to its iPhone lineup with the release of iPhone 8 next year.

"Shipment volume in 2Q16 came in higher than expected thanks to upbeat demand for the iPhone SE. However, in order to keep gross margin at a high level and to avoid cannibalisation of high-end models, we do not expect Apple to launch an upgraded iPhone SE in 2Q17. Without contribution from a new model, we forecast total iPhone shipment volume will reach 35-40mn units and fall YoY in 2Q17, lower than the 40.4mn units in 2Q16," Kuo said in his note to investors, 9to5Mac reported.

As per Kuo, there is no indication of whether or not Apple will refresh the iPhone SE in the future, but the company has been making efforts to maintain high gross margins through high-end flagships and minimize cannibalization. Kuo also predicts the sales of iPhone 7 in the first quarter of 2017 will not exceed the sales in Q1 2016.

Apple had shipped 51.2 million units in the first quarter of 2016 and the upcoming quarter will see somewhere between 40 to 50 million units shipped in the Q1 2017. But the iPhone 8 will turn tables in Apple's favours, Kuo said.

As per media reports, the iPhone 8 will feature a major overhaul, both in terms of design and performance. Besides the standard upgrades to its chipset, camera and battery, the iPhone 8 will feature an OLED display panel, an optic fingerprint scanner technology and all-glass design. The Cupertino-based tech giant is expected to launch three iPhones next year, one of which might be the most premium version.