Apple has discussed delaying the release of the 5G iPhone for several months, media sources reported, citing people familiar with the matter. Apple is discussing the delay because the global pandemic could hurt demand and disrupt product development timelines, people familiar with the matter said. Apple’s gains narrowed after the news, with gains of more than 4 percent in the session. The company finally closed down 0.55 percent at $245.52 on Wednesday.
Analysts at JPMorgan Chase said in a note Tuesday that Apple may delay the release of the new iPhone by a month or two because of production problems caused by travel restrictions and a possible slowdown in 5G network growth due to partial shutdowns.
Every year since 2011, Apple has launched its new iPhone in September or October. In most cases, the successful launch of new equipment, which accounts for more than half of revenue, is critical to the company.
But the outbreak and response to the outbreak pose some challenges for Apple, including disruptions in its manufacturing supply chain in China and questions about demand for high-end equipment in countries where the outbreak has closed. Apple’s stores outside China are closed until further notice.
“Given the multiple bottlenecks in evT (engineering validation testing, now planned for mid-April), PVT (production validation testing) and pilot production (now scheduled for late June), we believe that the release of the new iPhone may indeed be delayed by one to two months. But we don’t think it’s likely to delay one or two quarters. JPMorgan analyst Gokul Hariharan wrote in the report.
Analysts also predict that the U.S. embargo could delay the timing of 5G networks for operators, which could also affect the release of new iPhones that support 5G.
“Due to the current blocking, delays in the construction of 5G networks in the United States could be the main risk to the launch of the 5G iPhone,” the analysts wrote. “
Regardless of the release date of the new iPhone, the smartphone market was in trouble during the outbreak. Global smartphone shipments fell 38 per cent in February from a year earlier, the biggest drop since tracking statistics began in 2003, according to Estimates by Strategy Analytics.