In a new investor note from Timothy Arcuri (obtained via CNBC), the UBS analyst writes that supply challenges may force Apple to delay its 5G compatible iPhone until 2021. With Apple still entangled in a legal battle with Qualcomm, Arcuri articulates that Intel may not be able to supply 5G modems at the scale Apple needs. What’s more, Arcuri writes that striking a deal with other 5G modem providers like MediaTek represents an “unlikely solution.”
Consequently, Arcuri believes that there is an “increasing potential that Apple may not be able to ship a 5G iPhone for 2020” as initially believed.
If Arcuri’s prediction pans out, this would prove to be a major blow for Apple. Especially with iPhone sales growth on the decline, a 5G enabled iPhone is just the thing Apple needs to inject a bit of life into its iPhone lineup. Further, once 5G coverage becomes more widespread, Android devices with 5G will be much more intriguing than iPhone models without 5G. Suffice it to say, Apple is likely doing everything in its power to roll out 5G capable iPhones by 2020.
Of course, the problem is that it’s not really in Apple’s hands. Again, with Qualcomm off the table, Apple is essentially forced to strike a deal with Intel — a partnership that presents its own challenges.
To this point, Cown analyst Matthew Ramsay relayed the following just last month:
Apple’s first option, Cowen wrote, is to “launch 18 months after 5G competition with an inferior modem from Intel likely without mmWave capabilities,” referring to the band of spectrum that can be used for 5G’s high-speed wireless communications.
Another option would be to “source a 5G modem from chief competitor Samsung,” Cowen wrote, though it added that would likely come only on “tough commercial terms.” Using a 5G modem from Huawei is “off the table as an option,” Cowen told clients, while “MediaTek’s stack is too far behind in terms of timeline.”
There are, of course, rumors that Apple has been working on developing its own 5G modem, but there’s no indication it would be even close to ready to ship in 2020.
Apple of course has historically had no problem embracing new networking technologies late in the game. We saw this previously with Apple’s somewhat slow adoption of 3G and 4G LTE. 5G, though, is different. The technological lead Apple had over Android back in the day has narrowed considerably. These days, Apple doesn’t have the luxury to embrace new networking technologies significantly later than its Android counterparts. We can only hope that Intel manages to step up to the plate or that Apple, however unlikely, can reach some sort of settlement agreement with Qualcomm sooner rather than later.
