Kuo expects Apple to introduce the long-rumored 4-inch iPhone by the first half of this year. The phone has been dubbed the Apple iPhone 5se and will allegedly contain the Apple A8 chipset. Kuo expects the handset to feature 2.5D glass like the Apple iPhone 6s, and a 12MP rear-facing camera. He adds that not too much hardware innovation is expected from the new model, which will manifest itself in "tepid" sales of the new iPhone 5se.
The analyst also expects Apple's next flagship tablet, the Apple iPad Air 3, to be unveiled during the first half of this year. As far as the Apple iPhone 7 is concerned, Kuo says that Apple is working on "evolutionary" improvements in the chipset, camera resolution, battery life and more. He didn't have anything to add to the rumors that the iPhone 7 will not include a 3.5mm earphone jack. Nor did he comment on speculation that the unit will be waterproof.
Kuo is calling for Apple to announce that 77 million iPhone units were sold in the holiday quarter that ended in December. That would top the 74.5 million sold in the previous year's quarter. However, he does expect that the current quarter will produce the first ever year-over-year decline in iPhone sales. Kuo sees Apple ringing up 43 million units in the period, down 29% from the same quarter in 2015.
Kuo sent out his note on Sunday to clients of KGI Securities.