Apple is widely expected to reveal the 4-inch iPhone SE on March 21, a rumor supported by an invite wearing the words "let us loop you in." But while Apple may use the event to bring consumers and analysts up to speed about its upcoming products, the introduction of the smaller iPhone may be more about the company closing off a loop left open when it stepped away from small-faced phones.

It's expected to have the guts of an iPhone 6S, but the girth of an iPhone 5. Some had speculated that it'd be called the iPhone 6C or 5SE, but the consensus has now settled on Apple's next handset being called the iPhone SE.

The iPhone SE will have a 4-inch display, more pocketable than the 4.7 inch sizes of 6 series phones and more palatable for those have been turned off by the bigger screens Apple has been releasing.

The phone will reportedly have the latest in mobile processing from Apple, an A9 processor and M9 motion coprocessor, and it'll include a Touch ID sensor for security and Apple Pay.

Beyond the size of the phone, the major expected differences between iPhone SE and the iPhone 6 and 6S series will be the price and 3D Touch. It won't support the pressure sensitive system for touch input.

But what the iPhone SE won't have will be the things that may matter the most.

The Open Loop

Growth of Apple's iPhone sales have been slowing. But this year, the company expects to experience its first year-over-year decline -- that's if its upcoming products don't save the year.

About 20 percent of iPhone users are still using the iPhone 4S handsets or devices even older than that, according to data compiled by Fiksu last fall. The introduction of the iPhone SE may be about appealing to those who have been put off by the idea of upgrading to a 5.5-inch or even a 4.7-inch phone.


Analyst Gene Munster of Piper Jaffray has said that he also thinks the 4-inch phone and its updated hardware could appeal to the 20 percent of iPhone owners using the legacy hardware, but it may not be an easy sell.

While not necessarily the same 20 percent that is using the old hardware, about the same percentage of iPhone owners have said that they prefer phones smaller than what Apple has been offering as of late. But Munster, near the close of last year, thinks many holdouts are essentially stuck in their ways and would actually appreciate a bigger iPhone.

"The reality is that whether the device is real or not doesn't matter," Munster wrote last December. "We would not expect Apple to sell significantly more iPhone 6C devices than the typical low-end model (currently the 5S) and would also not expect margins to be significantly different.

Closing The Loop

It's not just the size of the iPhone SE that could entice holdovers to newer hardware. Its price could also pull more iPhone user forward.

The iPhone SE isn't expected to be all that much more affordable than the 6 and 6S series. But with its price expected to land somewhere around the $500 mark, the fitter iPhone will drive down the price of older iPhones.

Some analysts are anticipating a price cut to the iPhone 5S that'll be large enough to push the handset down into the budge category.

The phone is still going for $450 at many outlets right now, but the iPhone SE could push the price of the iPhone 5S down to $225, firmly in budget phone territory, and close the loop in an area where Apple has been leaking.

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