That is an important milestone that could convince millions of people to upgrade their smartphones. 5G was able to make the iPhone 12 a must-have product.
“We were before [expecting] 4 models with a 4G / 5G mix for the iPhone 12 unveiled, however now based on supply chain controls, we expect JUST 5G models for the Fall launch, “Ives wrote in an investor note Sunday night.
Apple did not respond to a request for comment on this story.
In recent years, consumers have waited longer between smartphone upgrades – a trend that could be exacerbated by the economic crisis fueled by the coronavirus pandemic. The biggest risk to new device sales is when “high unemployment and wage growth continue,” according to Synovus Trust Company Senior Portfolio Manager Daniel Morgan.
But analysts expect for the most part that the 5G iPhone will generate a “super cycle” from consumers buying new devices. Ives said he estimates that about 350 million of the total 950 million iPhones on the market could be upgraded to 18 months within the next year.
“We believe that iPhone 12 represents the most important product cycle for (Apple CEO Tim) Cook & Co. since iPhone 6 in 2014 and will be another defining chapter in the Apple growth story looking ahead despite a tougher environment for consumer spending,” said Ives , adding that he believes many on Wall Street “underestimated the massive rising demand for this supercycle for Apple.”
And Ives predicts a lower price, next generation 4G model will hit the market early next year, which would be a potential opportunity to play into consumers who are unable or unwilling to shell out for a 5G phone.
Creating a 5G-connected iPhone could improve the consumer experience for Apple’s digital services, such as Apple TV +. While iPhones have long been Apple’s biggest selling price, the company is increasingly dependent on services to diversify its sales: Overall, revenue for services reached a record $ 13.2 billion in June, stimulated by the pandemic-driven shift in habits.
“But with Apple, it’s such a loyal ecosystem,” Morgan said, meaning its customers were likely to stick to Apple’s 5G offering.
Ives said he expects Apple to release US and non-US versions of the 5G iPhone. He predicted the US version would be able to connect to the fastest 5G networks – built with “mmWave” spectrum – “after some technology shrinkage seems to be ironed out by Apple and its suppliers, which is a clear positive head in this pivotal launch.”
He also predicted that the new iPhones will go on sale in October. Apple said last month that although new iPhones will typically go on sale in September, this year the company expects to receive offer “a few weeks later” due to the pandemic.
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