- Apple’s iPhone 12 release may be delayed in a worst-case scenario as the world is still looking to get a handle on the coronavirus.
- The iPhone 12 was poised to be a huge release, complete with new and advanced hardware and, at long last, the inclusion of 5G support.
- The worldwide impact of the coronavirus is unprecedented in the modern era and there’s no telling the extent to which Apple’s bottom line will suffer as a result.
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With the iPhone 12 release presumably about six months away, one feature that was all but guaranteed was the inclusion of 5G support. Indeed, Apple’s insistence on rolling out a next-gen iPhone with 5G connectivity was the driving force behind the company’s decision to settle their bitter legal dispute with Qualcomm over iPhone royalties. Qualcomm, of course, is the biggest supplier of 5G chipsets and Apple, we would later found out, came to the conclusion that Intel would not be able to meet Apple’s 5G needs with respect to both performance and shipment volume.
The coronavirus, however, may ultimately throw Apple’s 5G plans on the back burner. A new investor note from Wedbush analyst Daniel Ives relays that the iPhone 12 with 5G may not hit store shelves this fall given that “the global lockdown-like conditions with the supply chain in Asia [is] still on a path to normalization.”
While it’s far too early to make any sweeping predictions, it’s hard to dismiss Ive’s note out of hand given that the coronavirus has turned the entire world upside down.
Of course, even if Apple does release the iPhone 12 with 5G on schedule this coming Spetember, there’s a good chance that sales will be tepid if the world can’t get a handle on the coronavirus. Indeed, there’s a possibility Apple may release the iPhone 12 into a world where most people won’t even be able to pick one up if they want to. Recall, all Apple retail stores outside of China are currently closed for the foreseeable future, with no indication as to when they might re-open. They might re-open as early as April or perhaps much later.
What is clear, though, is that Apple’s revenue this quarter — along with most other tech companies — is going to take a huge and unprecedented tumble.
Ive’s report reads in part:
[We] expect this black swan event to clearly have a major negative impact on Apple’s business model for the foreseeable future.
We are lowering our iPhone revenues by 14% in FY20 and 10% in FY21 to reflect the change in near-term consumer demand, lockdown conditions globally, and negative economic backdrop. Under this scenario we now assume only the installed base consumers currently in the window of an upgrade opportunity that have not upgraded their iPhones in more than 42 months purchase a new phone over the next 18 to 24 months. Currently we estimate that ~350 million of Apple’s 925 million iPhones worldwide are in this upgrade window, as we assume going forward in a more draconian scenario that minimal new smartphone activity takes place besides this segment of Cupertino’s massive installed base.
Apple’s iPhone 12 release was poised to be one of the company’s biggest in history. Now, with the entire world working together to stop the spread of the coronavirus, an iPhone 12 release in September may not be as sure of a thing as it was just a few weeks ago.
