On Wednesday, Apple (NASDAQ:AAPL) unveiled a new version of its budget-priced iPhone SE. The new device has a 4.7-inch display. The iPhone will be available in three different colors—black, white, and red. Notably, the new iPhone will officially go on sale on April 24. However, customers can start placing orders for the budget iPhone on Friday.
Will the iPhone SE save Apple stock?
The new iPhone SE will start at $399—the same price as the original model that came out in 2016. According to Apple’s marketing boss, Phil Schiller, the original iPhone SE was popular. Customers liked the phone because of its small size, powerful processor, and affordable price. Apple hopes that the latest model will also be a hit.
Notably, the company has gone to great lengths to make the 2020 iPhone SE a success in the COVID-19 challenged market. For example, customers who purchase the device also get one year of Apple TV+ video streaming service for free. An Apple TV+ subscription normally costs $4.99 per month.
Second, Apple has made it easy for low-income people to purchase the new device. The company allows an installment payment of just $9.54 per month for customers who might not be in a position to pay the $399 price upfront. Also, customers can trade in their old phone to get the 2020 iPhone SE at a cheaper price.
According to a Financial Times survey, the COVID-19 pandemic has slashed the incomes of nearly three-quarters of US households. Both the rich and the poor are feeling the economic pinch amid the pandemic. Therefore, Apple’s budget iPhone SE could be a perfect fit for the pandemic-hit market. The new iPhone could generate a tailwind for Apple stock. The shares fell in March and February amid signs of weak iPhone sales.
Apple stock rallies due to expected boost
Apple stock has rallied in recent weeks due to the impending launch of the cheap iPhone SE. Investors hope that the cheap device will help boost Apple’s sales in a market where businesses have shut down and millions of people have lost jobs. The low-cost device could boost Apple’s penetration in developing markets where budget phones typically have good sales.
The original iPhone SE arrived when Apple’s stock price was $105. Since then, the stock has risen more than 170% to $285 today. So far, the stock has risen 12% in April but still trades at a 12% discount to its 52-week high.