‘The biggest iPhone event in years’

On Tuesday, Apple will hold a launch event where it will reveal this year’s iPhone lineup.

In most years, Apple announces its iPhones in September and they go on sale soon after. This year is different. Instead, Apple released new Apple Watches last month and postponed the iPhone announcement until October. The delay is a consequence of the Covid-19 pandemic, which disrupted electronics manufacturing and forced most of Apple’s employees to work from home.

Still, this year’s iPhone launch is significant. It is expected to include the first major exterior redesign since 2017, when Apple launched the iPhone X with facial recognition. This year’s models will feature iPad-like edges with flatter sides, compared to the gently curved sides of current iPhones.

Apple is also expected to launch four separate iPhones with different screen sizes and prices, a much wider range of devices than in the past.

Finally, at least some new iPhones will support 5G cellular networks, which promise faster download times (although the networks are not fully built in the US yet, which might disappoint some users).

The last time Apple made such big changes to the iPhone was in 2014, when the iPhone 6 came out with bigger screens and two different sizes. That sparked a major refresh cycle, the so-called “supercycle,” with more than 231 million iPhones sold in the next four quarters. That remained the annual unit sales record until Apple stopped reporting on unit sales in 2018.

So this year’s changes have investors and analysts predicting a big refresh cycle that will make Apple even more valuable.

“We expect this fall’s launch to be the biggest iPhone event in years,” Morgan Stanley analyst Katy Huberty wrote in a note this week. She forecasts that Apple will ship around 220 million iPhones in its fiscal 2021 year, which would increase 22% year-over-year based on the Morgan Stanley model.

This is what to look for on Tuesday.

Morgan Stanley analysts are expecting an iPhone lineup of 4 new devices, including:

• iPhone 12 Mini, a new device with a 5.4 inch screen. This would be the smallest iPhone since the company debuted full-screen versions (no white space around the edges) in 2017, and will likely be roughly the same size as the iPhone 6.
• iPhone 12, the standard edition with a 6.1-inch screen, the same size as the current one.
• iPhone 12 Pro, also with a 6.1-inch screen but with higher specifications.
• Phone 12 Pro Max, which would have the largest screen ever at 6.7 inches (current iPhone 11 Pro Max maxes out at 6.5 inches)

Morgan Stanley’s expectations are based on supply chain information from Apple manufacturers in China. That means the actual names, which are controlled by Apple’s California product marketing, may end up being different.

Four models would be a dramatic expansion of their lineup, with a new smaller option and a larger high-end option, giving consumers more choice and could spur people to upgrade.

The phones are expected to be visually different from previous years’ models, giving users another reason to upgrade.

In the spring, Apple released a $ 399 4.7-inch iPhone with a fingerprint sensor this spring, the second-generation iPhone SE, which is expected to remain the least expensive iPhone after Tuesday’s launch.

“These 4 new models will accompany the second-generation iPhone SE released in Spring 2020 to understand the most comprehensive lineup of new iPhones from Apple,” Huberty wrote.

Apple currently sells the $ 699 iPhone 11 with a 6.1-inch screen, a $ 999 iPhone 11 Pro with a 5.8-inch screen, and a $ 1099 iPhone 11 Pro Max with a 6.5-inch screen. Apple can continue to sell these models; Usually, he takes $ 100 off the price of last year’s models and keeps them on store shelves.

Apple’s tagline for the event is “Hi Speed,” a reference to the faster cellular speeds promised by 5G phones.

Investors and analysts have expected for years that a 5G iPhone would represent a major upgrade and spur a big selloff not only for phone makers like Apple, but also for chipmakers like Qualcomm and carriers like Verizon and T-Mobile. , who have already bet heavily on 5G.

But some industry leaders are cautious. For example, AT&T Communications CEO Jeff McElfresh told CNBC in September that he didn’t think it was a “massive event.”

Part of the impact can be mitigated because there are three different varieties of 5G.

The biggest jump in speeds will come from the 5G variety sometimes called millimeter wave or ultra-wideband. But in the United States, the millimeter wave is only available in certain markets and has limitations on how far it can be transmitted. While carriers are expanding rapidly, the new iPhones may only be able to reach their full potential in a few regions.

AT&T and T-Mobile are currently claiming “national 5G,” using what are known as low-band networks, which have speeds closer to current fourth-generation LTE networks. That may disappoint consumers who have been looking for a massive upgrade.

Then there’s mid-band 5G, which promises to be significantly faster and cover wide regions, but is still under construction. T-Mobile said this summer that it expected to build its midband network “over the next few years.”

“Not all 5G is created equal, which has led to marketing buzz from operators regarding the performance and implementation of 5G,” wrote Loup Ventures founder Gene Munster in a newsletter. in September. “Ultimately, both consumers and businesses are unsure of the timing of the 5G transformation.”

Consumers won’t know until Tuesday if Apple will support all three versions on all of its phones, or if it will offer different models sold in different regions depending on which countries have the most developed 5G networks.

Apple CFO Luca Maestri said this summer that he expected iPhones to go on sale “a few weeks later” than the traditional September launch schedule.

Some models may go on sale shortly after the event, while others take longer to hit store shelves, likely due to the design and manufacturing challenges of tens of millions of devices during a global pandemic. Last year, ten days passed between the launch event and the first iPhones that went on sale.

“It remains somewhat speculative when exactly iPhones will be available for sale after this event, as Apple typically announces the first day of sale during the event,” Deutsche Bank analyst Jeriel Ong wrote in a note last week.

Timing is important to investors because Apple’s first fiscal quarter has already started, as of September 27. In recent years, some new iPhone models have been on sale for the entire period, but this year that will not be possible.

The number of weeks in the quarter that new iPhones are on sale could affect Apple’s performance in the critical holiday quarter, as people around the world buy iPhones and other products as holiday gifts.

IPhone syncing can also suggest which models might be in short supply, which investors watch closely to try to predict average sales prices for the quarter, affecting revenue.

We also note that certain models may have more drive volume limitations or the launch of the new iPhone will be staggered similarly to previous years, although this possibility seems to be disappearing as we have heard less about the possibility of further delays. recently, “wrote Ong.

Apple’s event invitation suggests it will last two hours, which is a long time to talk about phones. In the past, the company loved to preview “one more thing” at the end of its events before introducing an entirely new product category.

This year, they are likely to be audio products. Apple analyst Ming-Chi Kuo predicted earlier this year that Apple is working on over-the-ear wireless headphones that would carry its own branding (instead of Beats) and a smaller, less expensive HomePod speaker: the current version costs $ 299.

The luxury earbuds might appeal to buyers who have felt dull by the internal nature of Apple’s current AirPods, but want closer wireless integration with the iPhone.

A less expensive HomePod would make the product category more competitive with Amazon’s Alexa-powered speakers, which often cost less than $ 100.

Adding more credibility to this possibility, Apple stopped selling third-party headphones and speakers in its online store earlier this month, reflecting moves made in recent years before introducing new products.

Apple said earlier this year that the Mac computers with chips it designed would begin shipping before the end of the year. Today’s Mac computers use Intel chips. But those computers are likely not to be discussed Tuesday, according to a Bloomberg report. Instead, Apple could save that product for a launch event in November, which would be Apple’s third in the fall.

In recent years, Apple has only held one or two fall launch events. But this year’s releases are different: They are prerecorded and take place virtually due to the pandemic. There is also an ongoing appetite for Apple launches from customers, the media, and fans. Nearly 1.5 million people tuned in to a YouTube live stream last month to watch Apple executives announce new Apple watches.