Want another reason to buy AAPL stock? An iPhone SE 5G is coming

After a difficult start to 2022, Apple (NASDAQ:AAPL) stocks performed well last week. The catalyst was a blockbuster earnings report on January 27 that showed the company was selling iPhone 13s as fast as it could. Services revenue is also showing huge gains. Investors love this because it reduces the company’s reliance on hardware sales for growth. Windfall earnings led to the biggest one-day gain for AAPL shares since July 2020.

Source: WeDesing / Shutterstock.com

Apple’s power in the technology industry has also been highlighted recently.

Privacy features introduced in the company’s iOS – the operating system that powers the iPhone – are blamed for everything from a cataclysmic drop in social media ad revenue to the inability for Platoon (NASDAQ:PTON) to sell iPhone users fitness memberships.

There are plenty of reasons to consider adding AAPL stock to your portfolio, including huge releases around the corner like the company’s AR headset and Apple car.

For now, I want to focus on something more immediate catalyst: the iPhone SE 3 5G.

iPhone SE is still a key driver for AAPL stock

The original iPhone SE was released in 2015. Featuring modern components in an older, no-frills form factor, it was priced at $399. By comparison, the cheapest iPhone 6S (the current mainstream iPhone model at the time) started at $649.

The iPhone SE filled a void in Apple’s iPhone lineup, providing a low-cost option for consumers who couldn’t afford a flagship smartphone. With the iPhone being the primary driver of AAPL stock growth since 2007, this was a big step forward.

The iPhone SE has an even more important job for Apple than attracting value-conscious buyers. One of the great advantages of iOS over Android as a platform is the fact that the latest version of iOS is quickly adopted by the vast majority of users. Adoption of the latest version of iOS (iOS 15 September 2021) has actually been slower than usual – it recently reached 70% of all iPhones released in the last four years. By comparison, it’s a good year if 25% of Android phones are updated to the latest operating system.

Having so many iPhones running current software is a big competitive advantage for Apple. This makes the platform more attractive as new features can be used by more people. It also makes iOS more appealing to app developers. They can count on more phones that can run their apps without compatibility issues.

The iPhone SE might be a “cheap” iPhone, but it also offers a very simple upgrade path for owners of outdated iPhones. Having them ditch a five-year-old iPhone for an iPhone SE generates less revenue for Apple when selling, but it helps retain the advantage of iOS overall.

Apple is expected to introduce the iPhone SE 5G this spring

The iPhone SE was a hit for Apple. After the original, a second-generation iPhone SE was launched in 2020. The company is expected to announce a third-generation iPhone SE at an event next month.

This may be the biggest iPhone SE launch yet, as the new model will feature 5G. Although not without controversy, 5G has become a must-have feature for smartphones. It’s the kind of upgrade that convinces even longtime holdouts to buy a new phone.

Last December, a JP Morgan analyst predicted that a 5G iPhone SE would have the potential to reap massive sales thanks to upgrades in the iOS and Android camps. What kind of numbers are we talking about? The analyst estimates there are 1.4 billion low-end and mid-range Android users in play, along with 300 million owners of older iPhones. This represents 1.7 billion potential buyers.

To put that into some perspective, Apple is estimated to have sold around 40 million iPhone 13s and iPhone 13 Pros over the holidays. Look at the effect this had on the AAPL stock.

The iPhone SE 5G could indeed be a very big deal.

Conclusion on AAPL actions

The AAPL stock obtains a “B” rating in portfolio binder, and it has generated a return of 426% over the past five years. The iPhone SE3 5G could well give a new impetus to the company. With AAPL still down more than 4% in 2022 and the iPhone SE3 due in a few weeks, now would be a good time to act if you’re considering Apple stocks for your growth portfolio.

As of the date of publication, neither Louis Navellier nor the member of the InvestorPlace research staff principally responsible for this article holds (directly or indirectly) any position in the securities mentioned in this article.

Louis Navellier, who has been called “one of the most important fund managers of our time”, broke his silence by this shocking “say it all” video… exposing one of the most shocking events in our nation’s history… and the one move every american has to make today.

About Franklin Cheatham

Check Also

iPhone 14 is the most repairable since iPhone 7 – teardown reveals impressive details

Samsung hasn’t changed its smartphone design architecture since 2015, and Apple, its main competitor, broke …