Apple Inc.
AAPL 1.74%
There is a master in upsell, but 5G will probably present the company with its biggest challenge.
The tech giant has scheduled an event on October 13, when the iPhone lineup is expected to be unveiled this year. Notably, the company has said nothing about its plans for what the 20th iteration of its iconic smartphone will be, not counting the big-screen variants of the same models. But through leaks and supplier reports, everyone has confirmed that the next 5G 5G wireless standard will be included in at least some of this year’s designs, and Apple itself called the event “Hi, Speed” on its announcement.
Almost all the competitors of the company – including the big ones, Samsung ready Alderi have 5G phones in the market. But most of the world’s 5G operations are taking place in China, which accounted for more than three-quarters of 5G device shipments in the second quarter, according to Counterpoint Research. U.S. In, 5G coverage is still limited, even in big cities. Which has hindered the emergence so far. IDC estimates that in the first half of this year, U.S. Sold 2.4 million GG smartphones in India – about 5.5% of total domestic smartphone shipments at the time.
Apple is widely expected to accelerate that. Counterpoint analyst Jeff Fieldheck predicts that the new iPhones will rapidly increase the market share of 5G devices this year, resulting in such phones accounting for 20% of domestic smartphone sales by the end of the year. And many equity analysts have begun to reuse the term “supersicycle”, which was used in the past to predict a strong iPhone cycle, although not always accurate. Analysts say sales of the Project iPhone unit will increase by 10% in Apple’s current fiscal year by the end of next September.
In return, Apple Pal’s stock has rallied, rising 59% so far this year even after retreating from its September 1 peak this year. With more than 31 times the period ahead of earnings, the stock remains in its most expensive valuation range for more than a decade.
Is the 5G iPhone worth it? Probably not – if that’s just the selling point. Comparing the past is problematic. The last major network transition to the current standard, known as LTT, took place in the 2010-12 period, when smartphones were still the fastest growing business globally. Apple’s first LTE device was the iPhone 5, which launched in late 2012. The device also predicted a “supersicycle”, although the low profit margins of sales and phones didn’t live up to this hype. Apple Pal’s share price rose 65% that year before the iPhone 5 launch and fell 24% for the rest of the following year.
Smartphone buyers are more encouraged by improved features such as screen size, better camera and longer battery life. The iPhone 6 cycle, which began in late 2014, became the best of the moment, thanks to a significant increase in display-size delivered by the device. And last year the iPhone 11 Pro model became more popular than expected with its triple-lens camera. Analysts believe that in the fiscal year ended September, models accounted for 28% of the total iPhone sales volume, compared to 23% of the previous year’s top line f-line iPhone models, according to Visible Alpha.
The success of last year’s iPhone is really another challenge for this year, as smartphone buyers now hold their devices for three to four years. Apple Pal still has a strong base of fans who are willing to line up for what the company comes up with every year. Getting enough of it to justify a market value of 2 2 trillion would be a tall order.
Write to [email protected] at Dan Gallagher
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