Apple’s 5G iPhone to be greater than 5G

Apple Inc.

AAPL 1.74%

There is a master of ups and downs, but 5G can present its biggest challenge to the company.

The tech giant has scheduled an event on October 13, when it is widely expected to unveil this year’s iPhone lineup. As is typical, the company has not said anything about its plans for what will be the 20th iteration of its iconic smartphone, not counting the larger screen variants of the same model. But leaks and supplier reports have all confirmed that the next-generation 5G wireless standard will be included in at least some of this year’s designs, and Apple itself called the event “hi, speed” upon its announcement. .

Almost all of the company’s competitors — the largest of which, Samsung — already have 5G phones on the market. According to Counterpoint Research, most of the world’s 5G action is taking place in China, which accounts for more than three-quarters of 5G device shipments in the second quarter. In the US, 5G coverage is still limited, even in major cities. This has hindered the lifting so far. IDC estimates that 4.2 million 5G smartphones were sold in the US in the first half of this year – about 7.5% of total domestic smartphone shipments at the time.

Apple is expected to be widely promoted. Counterpoint analyst Jeff Fieldhawk predicts that this year’s new iPhones will rapidly increase the market share of 5G devices, resulting in such phones accounting for 20% of domestic smartphone sales by the end of the year. And many equities analysts have begun to reimagine the term “super cycle” used to predict strong iPhone cycles in the past – though not always correct. According to Visible Alpha’s consensus estimates, iPhone’s total sales are projected to grow by 10% in Apple’s current fiscal year ending September next year.

In return it has fueled Apple’s stock, which has so far this year in its Sept. Even after retreating from 1 peak, 59% has bounced. At more than 31 times earnings, the stock remains in its most expensive valuation range for over a decade.

Is a 5G iPhone Worth It? Probably not – if that’s the only selling point. There are previous comparative problems. The last major network transition to the current standard known as LTE occurred in the 2010–12 timeframe, when smartphones were still rapidly developing globally. Apple’s first LTE device was the iPhone 5, which was launched in late 2012. That device also gave rise to “Super Cycle” estimates, though sales and the phone’s low profit margins did not live up to the hype. Apple’s stock price rose 65% before the iPhone 5 launch that year and then slipped 24% the rest of the year.

Smartphone buyers are inspired by improved features such as screen size, better cameras and longer battery life. The iPhone 6 cycle, which closed at the end of 2014, was Apple’s best ever performance, thanks to a significant display-size boost that resulted in the delivery of the device. And last year’s iPhone 11 Pro models became more popular than expected with their triple-lens cameras. Analysts believe those models accounted for 28% of Apple’s total iPhone sales volume for the fiscal year, compared with 23% of last year’s top-of-the-line iPhone models, according to Visible Alpha. Was accounted

The success of last year’s iPhones is actually another challenge for this year, as smartphone shoppers now hold onto their devices for three to four years. Apple still has a strong base of fans who are ready to join the company every year. Getting enough of them to justify a market value of $ 2 trillion would be a tall order.

Write Dan gallagher at [email protected]

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