Apple will launch a 5G iPhone in 2021, and only in China says one analyst

Apple will launch a 5G iPhone in 2021, and only in China says one analyst
Lynx Equity Strategies is a research firm that sells its services to funds that are heavy into technology stocks. So naturally, one of the companies that it follows religiously is Apple, which will report its fiscal second-quarter earnings tomorrow (Tuesday) after the stock markets close in the U.S. According to Seeking Alpha, a Lynx analyst doesn't have what you would call a bullish report on the company.

Despite the wholesale and retail price cuts made by Apple in China, and the global trade-in deal that discounted the price of the 2018 iPhones, Lynx says that Apple has had trouble selling out its inventory. As a result, the research firm now sees Apple selling 173 million iPhones for the year, an 8% cut from its previous estimate of 188 million units. At the same time, the firm cut its forecast of 2019 iPhone revenue by 10.1% from $143.5 billion to $129 billion. Apple no longer releases the number of iPhones it sells each quarter but does announce the change in revenue generated from such sales. For example, during the fiscal first quarter covering October through December, Apple said that the iPhone brought in 15% less revenue than what the company collected during the fiscal first quarter of 2018.

And Lynx also isn't terribly impressed by the recent settlement that gives Apple access to Qualcomm's 5G modems. While many in the industry now expect Apple to launch a 5G iPhone next year, the equity research outfit still doesn't see a 5G iPhone being unveiled until 2021. And even then, Lynx believes that such a device will be offered only in China; the firm says that U.S. interest in 5G is focused on enterprise and smart city apps rather than consumer devices. That might be a stretch since it appears that Apple was desperate to find a source of 5G modem chips. With several Android handsets expected to be released this year with support for the next-generation of wireless connectivity, Apple surely doesn't want to fall too far behind. And if Apple was thinking about waiting until 2021 to sell a 5G iPhone only in China, why did it push Intel so hard to develop its component in time for a 2020 launch? Lastly, Lynx says that Apple's shares should be valued at $185. Considering that Apple is currently trading at about $205, the research firm believes that the iPhone manufacturer is currently overvalued by nearly 10%.

Consumers are now buying lower-priced Apple iPhone models


Yahoo notes that other analysts have various opinions. Raymond James' Chris Caso says that he believes that Apple sold 42 million iPhones from January through March, down 19.6% year over year. He also sees consumers moving toward the lower end of the iPhone spectrum with the Average Selling Price (ASP) dropping 15% year-over-year by the end of the calendar year. This, he says, will hurt margins and even Apple Care revenue. Angelo Zino, an analyst with Investment research firm CFRA, says that consumers are waiting longer before upgrading to a new iPhone. This, she says, will end once the 5G iPhone is launched, something she expects to see next year. Bank of America analyst Wamsi Mohan has a different focus. He is looking at the company's margins. He says that despite the cuts in iPhone pricing, things would be looking up for Apple if it can report gross margins of 37%-38%. Bank of America has a target of $220 on Apple's shares, a 7% pop from the current price. UBS analyst Timothy Arcuri is among the most positive on Apple. He agrees that consumers are purchasing lower-priced iPhone models and expects that the ASP for the second fiscal quarter will be $687, down from the $745 reported last year. Still, he remains bullish on the stock and sees Apple rising 15% to $235.

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15 Comments

1. cmdacos

Posts: 3818; Member since: Nov 01, 2016

#futureproof

2. Well-Manicured-Man

Posts: 653; Member since: Jun 16, 2015

I don’t understand all the fuss about 5G for 2019 or 2020 phones?I am not even sure whether 5G will be an actual thing in 2021. I am sure 5G will enable a new, smartly connected world but the infrastructure is in its infancy. It will take us some years before we can actually make use of 5G and until then, most people that have bought a flagship this year will have bought a new one.

4. midan

Posts: 2557; Member since: Oct 09, 2017

Exactly I'm Interested of 5G when it doesn't add any extra cost. If i get faster connect for free why not, but with current very fast 4G speeds, there's no need to pay for 5G.

5. Well-Manicured-Man

Posts: 653; Member since: Jun 16, 2015

True in particular when you consider that you pay for something that you cannot use because there is no infrastructure established yet.

9. iushnt

Posts: 3054; Member since: Feb 06, 2013

If it’s not started now, the infrastructure development process won’t ever happen. Has to start somewhere by someone for someone.

12. mackan84

Posts: 167; Member since: Feb 13, 2014

Could someone please tell me what this infrastructure development is? What could I do with my smartphone if it had 5-10 times faster internet? Will a webpage load .1 ms faster? 4K embedded videos on websites? Don’t see the need for a smartphone with that speed. 5G at home to my laptop and tv would be nice but my WiFi is pretty solid already so that depends on speeds, price and limits.

8. Dr.Phil

Posts: 2252; Member since: Feb 14, 2011

The problem with 5G and even 4G LTE is that the majority of cell phone companies still throttle your data even if you have access to unlimited. The second problem, which isn’t really a problem, is that there’s now more and more access to Wi-Fi hotspots which eliminate the need for 5G. Years ago 4G LTE speeds were huge because there wasn’t as many places that gave you access to their Wi-Fi hotspot. Now it’s second nature to walk in to a place and have access.

3. User123456789

Posts: 402; Member since: Feb 22, 2019

What a failure

6. midan

Posts: 2557; Member since: Oct 09, 2017

Why these analysts thinks that 5G going to be somekind of solution for stagnant smartphone sales. I don't see any interest from people towards 5G. These companies going to have very difficult times to sell more expensive 5G phones and more expensive data plans.

7. scarface21173

Posts: 631; Member since: Aug 17, 2014

You say stagnant because apple are not selling as many phone. But look at huawei there selling boat loads.

11. mackan84

Posts: 167; Member since: Feb 13, 2014

Yes they do but the smartphones sold is less then a year ago. It will probably decline more and people will keep their smartphone longer. That is the point of stagnant.

10. User123456789

Posts: 402; Member since: Feb 22, 2019

If Apple had first 5G device, people would mock the ones without it.

13. mackan84

Posts: 167; Member since: Feb 13, 2014

We come from tribes. Give us another hundred thousand years before you mock our irrational beliefs.

14. iloveapps

Posts: 408; Member since: Mar 21, 2019

Analysts doesn’t know that people buy phone for 2-5yrs and the only thing that’s good is to established an ecosystem like apple and provide good services.

15. Leo_MC

Posts: 6391; Member since: Dec 02, 2011

I'm reading a lot of articles about what this so called analysts are saying, but none of them contains the REASONS behind this opinions. I mean, maybe someone is going to say that he thinks that Blu is going to sell 2 billion devices with 6G; are we supposed to waste time reading that without knowing what made that dude get to that conclusion?! All this articles are based on a logical fallacy: "we publish this, because the source is a [so called] analyst". That's not journalism, that's tabloid...

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