There are so many different stories circulating about Apple right now that it is difficult to know which one is true. Just yesterday we told you that a senior official with one of the Chinese companies that supply Apple said that the ramp-up of the assembly lines to produce the upcoming 5G iPhone models has been postponed. Other reports are much more optimistic including one from analyst Gene Munster that gives a rational expectation why we should expect that the 5G 2020 iPhone models will still be unveiled and launched this fall.
One of the reasons why we can't seem to get analysts to agree on what is going to happen is that while China appears to have turned the corner on new coronavirus cases, the rest of the world is getting worse. Apple has reopened its 42 Chinese brick and mortar locations and iPhone assemblers Foxconn and Wistron have hired the usual number of assembling line personnel needed to churn out the initial orders placed by Apple for the 5G 2020 iPhone models. But consumers in markets that Apple relies on for strong iPhone demand including the U.S., are not ready emotionally to focus their attention on smartphones. And with many out of work and just trying to meet their monthly "nut," buying an expensive new iPhone is the last thing that they are thinking about doing right now.
Strong sales of the iPhone 9 could be a bad sign for Apple's flagship phones
According to the Wall Street Journal, the economic upheaval caused by the coronavirus is forcing consumers who traditionally update quite often, to stick with their current daily driver. The business newspaper cites the experience of sports-radio producer Adam Michaels who usually buys four new iPhones every other year for himself and his family. "The expense is not worth it right now," he says. And while Apple will soon have to start ordering supplies needed to build its 2020 5G flagship iPhone models, gauging demand for anything right now is nothing more than a wild guess. Depending on when Apple's entry-level iPhone 9 is released, the company might be able to use the demand for this device to gauge how much demand there will be for its 5G enabled flagships.
The iPhone 9, which will use the body of the iPhone 8 and the same A13 Bionic chipset that powers its 2019 flagship phones, will start at $399 for the 64GB base model. Stronger than expected sales of this model could be negative for Apple since it might be an indication that some consumers are turning to the lower-priced model instead of the pricey flagships. However, the flagship units will feature 5G connectivity whereas the iPhone 9 won't. So in one regard, this will be a test of the demand for 5G. The next generation of wireless connectivity, 5G will deliver 10 times the download data speed of 4G LTE leading to new technologies and industries around the world. In most countries though, we are in the early days of 5G and the carriers have yet to offer consumers the full capabilities of this technology.
Apple hopes to start production of the four rumored new 5G models in July which means it needs to start ordering from its supply chain now. And that takes us back to the beginning of the circle. Japan's Nikkei news agency says that Apple could delay the launch of its first 5G iPhones by as much as two months while others, including famed analyst Gene Munster, see Apple sticking to the traditional September release. It might not be for some time before we know exactly what Apple intends to do. With the WWDC developer conference moving online possibly in June, we can be on the lookout for any clues that might reveal whether Apple is planning to delay the launch of its first 5G handsets.