Smaller iPhone expected

SAN FRANCISCO: Apple Inc is expected to launch a smaller, cheaper iPhone on Monday aimed at emerging markets and possibly China, the world's biggest buyer of smartphones, as it looks to reverse a decline in worldwide sales of its most important product.

The launch of such a phone - expected to be called the iPhone SE - would represent Apple's second bid for the crowded mid-tier market after an unsuccessful foray three years ago.

It might give the world's best-known technology company a boost in the fast-growing Indian, Middle East and African markets, but also risks cutting its average phone prices and profit margins.

"The iPhone SE provides a new incentive to upgrade for iPhone holdouts who don't want a large-screen phone," said analyst Bob O'Donnell of TECHnalysis Research. 

A less expensive iPhone could appeal to emerging markets customers, said O'Donnell, but is not a sure-fire hit, as it may still be pricier than competitors running Google's Android system, and many in emerging markets have already developed a taste for larger screens.

Apple has invited reporters to an auditorium at its Cupertino, California headquarters in Silicon Valley on Monday, a cozy venue compared with the massive San Francisco stages where it typically unveils new iPhones and major products.

As is its tradition, Apple has been silent about what is on offer, but technology and financial analysts predict a cheaper, entry-level phone with a screen around 4 inches (10 cm) that still runs some of the latest features such as Apple Pay.

The more compact design comes after its move to expand the size of the screens in its high-end iPhone 6 and iPhone 6 Plus phones in 2014, featuring a screen as large as 5.5 inches.

That was broadly seen as an attempt to match rival Samsung Electronics with its large-screen Galaxy phones.

The iPhone is sold around the world, but with a price starting at $649 for the current top model without a contract, it is beyond the reach of many.

A mid-range or entry-level phone could broaden Apple's appeal, although it is not clear what price range it will aim at.