The iPhone 5se: Everything That’s Wrong With Apple Inc. (AAPL)

Apple stock holders need to start asking tough questions about the company's future

Really, Tim Cook? Really? You have access to arguably the world’s greatest consumer technology developers and most recognizable brand name — Apple Inc. (AAPL) — and your next big product is revamp of the flagship iPhone you were making two generations ago?

The iPhone 5se: Everything That's Wrong With Apple Inc. (AAPL)

The first notable difference between the iPhone 6s and the iPhone 5se is the size, with the 5se sporting the 4-inch screen of the original iPhone 5.

While it’s not the sort of “WOW” material we got under the Steve Jobs era, the iPhone 5se is rumored to offer a couple of cool upgrades. Namely, an NFC chip for use with Apple Pay, improved Bluetooth hardware and software, and faster chips (maybe even the A9 or M9).

Still, is it time for owners of Apple stock to at least discuss the possibility that Apple is running out of ideas?

Meet the iPhone 5se

The device won’t be officially unveiled until mid-March (if it’s actually unveiled then); and as is usually the case with any new or renewed Apple product, the rumors — many of them accurate — have almost told the market everything it could want to know about the impending device.

Indeed, the word is that a couple of Apple employees have already acknowledged that the “se” in iPhone 5se has the dual meaning of “special edition” and iPhone 5s “enhanced.”

Point being, there are a lot of specific details for the name to be just a rumor.

More importantly, Apple tacitly acknowledges the upcoming device is not a step forward in the iPhone line. The next one due is, or was, the iPhone 7, following the recently released iPhone 6s.

In all fairness, it’s not a step backward either, at least in terms of the underlying technology. The device is in several ways superior to the iPhone 6s. The aforementioned A9 and M9 chip is a big upgrade, and it’s got a barometer built in for those consumers who (for whatever reason) need such information.

The camera is a bit better as well, though not significantly so. Indeed, the only truly meaningful difference between the iPhone 6s and the iPhone 5se is the 4-inch screen.

Why Not an iPhone 7?

The question everyone’s asking themselves is the right one to be asking — why an iPhone 5se? Why not an iPhone 6se, or why not make what’s going to be the iPhone 5se part of the iPhone 7 lineup?

If nothing else, reverting to an older model risks sending the wrong message to current and would-be buyers. Indeed, it does send the wrong message about AAPL stock. That message being that Apple has so few new product or technology ideas it doesn’t even feel comfortable forging ahead with its sequential numbering scheme.

That’s the market’s chatter anyway, not that the market is wrong to have doubts about the company’s future.

While Apple has remained relatively mum on the new/old iPhone, it’s not a stretch to say this psychological step back is a means with which the company can go back and secure upgrades from iPhone 4, iPhone 5 and maybe even iPhone 3 (yep, there are some still out there) owners.

Those users who didn’t nibble on the iPhone 6 for price reasons (and thus would be unlikely to upgrade to an iPhone 7) could be tempted by the iPhone 5se, which is expected to sport a more affordable price tag than Apple’s current lineup.

That tactic and rationale is alarming in itself.

In many ways the mere premise and psychology of an iPhone 5se suggest Apple is running out of product ideas to sustain its once red-hot-growth. It’s becoming increasingly likely that Apple is losing control over its ability to command a premium price, as its iPhone upgrade cycle slows and sales saturate.

It’s entirely possible the 5se could cannibalize the iPhone 7.

Bottom Line for Apple Stock

Despite the alarmist take on the matter, Apple isn’t doomed and Apple stock isn’t going to zero.

But this should be the line in the sand where shareholders start asking some serious questions, beginning with asking what Apple want wow innovations it has in the pipeline. That’s something Apple hasn’t shown us in a long while.

It might not have to be a phone that does it, which may be the core of the headwind in itself as Cook seems intent on iPhone derivatives rather than developing something the world’s never seen.

The company could use a Steve Jobs right about now.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

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