Analyst Ming-Chi Kuo's predictions in early 2018 rang true; he suggested that along with updates to the iPhone X and a bigger version with an OLED screen (now known to be the iPhone XS and XS Max), Apple would launch a cheaper iPhone in September 2018.
Except the new phone would be a 6.1in model with an LCD screen that it would be priced much higher than the iPhone SE is currently. This is essentially what happened. The iPhone XR arrived and the iPhone SE was discontinued in September 2018, leaving Apple's lower-priced and older iPhones to meet the budgetary demands of the low-end of the market. This is a typical strategy for Apple, to focus on making more money from the phones it does sell, with a higher amount of profit per device sold. This has always worked well for the company - and pleased its shareholders. Speaking of shareholders, Apple announced in its Q4 2018 financial call that it would no longer report per device sales instead focusing on profit. This is key: Apple anticipated that it would see fewer sales of handsets, but intended to continue to make lots of money, and that's what it wanted attention to be on. However, following Tim Cook's profit warning to investors in early January 2019 it seems that that strategy may not be paying off as well as Apple had hoped. We're talking a lot about the market in China above, but all the above probably rings true in the rest of the world. Could a new cheaper handset be the solution to falling sales and the associated lower profit in these times of economic uncertainty? If the iPhone XR is indeed the replacement for the iPhone SE, does that mean Apple will no longer continue to sell a smaller handset? Perhaps. But before you rush off to look at smaller Android handsets, bear in mind that the iPhone XS squeezes a bigger screen into a smaller handset that's 143.6mm by 70.9mm, and is 7.7m thick, while the iPhone SE is still a small 123.8mm by 58.6mm and 7.6mm thick. That's just 2cm longer and slightly more than 1cm wider, so the iPhone XS may not be as massive as you were thinking... How about an iPhone XR mini to appease those who desire a smaller iPhone? While Apple may not want to revive the iPhone SE for fear of looking like it is stepping backwards, reworking the iPhone XR into a smaller shell would allow it to create a new smaller, cheaper handset to appeal to this huge market. .