Apple’s 1 a.m. launch on October 14th, Beijing time, will be held, and the new iPhone is in the eye. Apple is expected to announce at the launch the biggest improvement on the iPhone since 2014. Analysts and investors widely expect Apple’s latest line of iPhone 12s to be equipped with 5G, setting off a wave of upgrades among nearly 1 billion iPhone users worldwide.
Will the iPhone 12 set off a “super cycle” of changes, benefiting industrial chain companies?
Analysts are racing to look ahead.
Wayne Lam, an independent analyst, told First Financial that the rotation cycle would be a “supercysm”. “This may prompt more consumers to make the decision to buy a new machine, because the importance of smart devices, including mobile phones, became more apparent during the new crown pneumonia pandemic, ” he said. As a result, the launch of Apple’s new machine will be critical to consumers and the industry as a whole. “
Daniel Morgan, vice president and senior portfolio manager at Synovus, a financial institution, said the last major “supercystorm” for iPhone upgrades was in 2014, when Apple launched the iPhone 6. “But since 2014, the iPhone has been released more like a ripple than a wave.” Mr Morgan said.
The launch will be crucial for Apple, which lacks revolutionary hardware updates. In recent years, Apple’s growth has relied on its services and accessories business. At last month’s launch, Apple unveiled a new generation of smartwatches and the first Apple Watch without binding a smartphone.
Bernstein, a research firm, estimates that 18.5 per cent of iPhone users, or about 180m people, plan to change their phones in the next 12 months. Over the past two years, Apple’s iPhone replacement rate has remained around 16%.
Katie Huberty, an analyst at Morgan Stanley, expects Apple to sell 220m iPhones in the fiscal year that begins this month, up 22 per cent from a year earlier, which would boost annual revenue by more than a fifth to $327.7bn.
Ms Huberty said she expected iPhone sales of up to 240m units if Apple could attract more Android users to apple. “We expect Apple’s upcoming launch to be the most important in years.” She said in a report to clients.
Wedbush, a Wall Street brokerage, is expected to be more aggressive, saying 350m of the world’s 950m iPhones should be upgraded, setting off an unprecedented wave of changes.
Pricing determines demand.
Apple’s share price has risen more than 50 percent so far this year. Analysts expect Apple’s new iPhone launch, if priced properly, to boost supply chain companies’ share prices. This means that domestic Apple supply chain companies, including Lanth Technology, Lixun Precision, Gower shares, etc., are expected to benefit.
The impact of Apple’s new 錤 on supply chain companies depends largely on the price of the iPhone 12, according to a new research report released on October 11th by Tianfeng International analyst Guo Ming錤 “If the iPhone 12 sells for less than the iPhone 11 (starting at $699), we expect supply chain prices to continue to rise after the launch of the new iPhone.”
Apple will launch 錤 iPhones at the launch, with sizes from 5.4 inches to 6.7 inches, according to Mr. Guo.com. These include a smaller iPhone 12 mini, a basic iPhone 12, and two higher-profile iPhone 12 Pros and iPhone 12 Pro Max. The proportion of shipments of the four products is 20% to 25%, 40% to 45%, 15% to 20% and 15% to 20%, respectively.
In terms of shipments, Mr. Guo estimates that the iPhone 12 series will ship between 80 million and 85 million in the fourth quarter of this year, up from 75 million in the iPhone 11 series錤
Despite market doubts that the iPhone is slower to launch 5G than rivals such as Samsung and Huawei, analysts say the lack of full popularity of the 5G network means there is still plenty of room for growth in 5G smartphones.
Only 13 per cent of smartphones sold in the first half of 2020 have 5G capabilities, and only 6 per cent of customers have 5G as the main factor in their next smartphone purchase, according to Ben Stanton, an analyst at Canalys, a research firm.
“It’s not too late for Apple to launch the 5G because smartphones with 5G capabilities are not yet widely adopted, ” says Mr Stanton. Part of the reason for this is that killer apps for mobile 5G have not yet emerged. “
In recent years, Apple has begun to widen the price gap between its products, pricing them more competitively to attract users at all levels of consumption. “Over the past 12 months, Apple has made serious efforts to make its hardware more affordable.” “But Apple’s biggest challenge is to find a way to become more competitive without weakening its brand image, ” Stanton said. “
Peng Luping, vice president of mobile operations at Canalys, told First Financial: “The new crown pneumonia outbreak is a huge blow to consumer confidence, the global spending power is declining, so the pricing of this iPhone release is very important.” “
China has the highest percentage of all consumers willing to pay higher prices for a change of machine, according to a small user survey conducted by Canalys. According to the study, 32 per cent of Chinese consumers said they would be willing to pay more for a new model immediately, compared with 10 per cent in the US and Europe, and 17 per cent in India, second only to China, who are willing to buy a new model at a higher price.