With Apple 5G modem likely in 2021, prospects for 5G iPhone in 2020 'in jeopardy'
Apple is running up against pre-production deadlines to have an 5G modem in the 2020 iPhone, so it may wait until Apple is done with an in-house solution in 2021 a UBS analyst said on Wednesday.
"Barring settlement w/QCOM [Qualcomm] in the next few months, field work suggests Apple is increasingly in jeopardy of being unable to ship a 5G iPhone in 2020," wrote UBS' Timothy Arcuri. Intel likely won't be ready with a single-chip, backwards-compatible 5G modem in time, he continued, asserting that alternatives like Samsung and Mediatek are either "technically or practically" outside Apple's wheelhouse.
Arcuri reiterated his belief that Apple is working on a self-designed modem for 2021, and that Intel should sell its modem operation, possibly even to its current largest client, Apple. iPhones are now almost entirely based on Intel modems, the only exceptions being to skirt bans because of the ongoing legal war between Apple and Qualcomm.
Apple has reportedly been restructuring its internal hardware teams, possibly with a 5G modem in mind. Senior VP of hardware technologies Johny Srouji is allegedly overseeing that modem design, but it's unknown how far along development might be. Apple has been designing other chips for about a decade, such as A-series processors and W-series wireless modules.
Intel's 5G model will appear first in backbone and other commercial gear in 2019. The first consumer phones with Intel 5G modems are expected in 2020, which casts doubt on UBS claims. To be in an iPhone however, modem samples will have to arrive in time for testing, integration, and optimization, and at present it isn't clear where Intel and Apple are on that timeline.
Tangentially, Arcuri said that UBS is estimating that about 470 million of the 900 million iPhones in Apple's install base are "firsthand" purchases, "and thus the proper denominator against which to estimate upgrade rate." The firm calculates that of 204 million iPhones sold in 2018, 140 million were upgrades, giving Apple a rate of 3.4 years.
"While it is possible/likely this continues to lengthen, AAPL remains steadfast in its estimate that actual upgrade rates are [less than] 3 yrs which suggest we are now actually below full replacement rates - a factor which should soften any potential impact from the lack of a true 5G phone in 2020," the analyst commented.
He estimated that there could be as many as 185 million iPhone 5, 5s, 5c, SE, 4S, and 4 units in use, most of them secondhand, though they could be a "big opportunity over the coming years maybe catalyzed by creative lease/service offerings."
Today, the "realistic pool for services engagement" is between 500 and 600 million iPhones, Arcuri said, arguing that penetration by Apple TV Channels and Apple TV+ will be "deeper and faster" than Apple Music.
UBS is holding a "buy" rating for Apple stock with a $215 price target.
"Barring settlement w/QCOM [Qualcomm] in the next few months, field work suggests Apple is increasingly in jeopardy of being unable to ship a 5G iPhone in 2020," wrote UBS' Timothy Arcuri. Intel likely won't be ready with a single-chip, backwards-compatible 5G modem in time, he continued, asserting that alternatives like Samsung and Mediatek are either "technically or practically" outside Apple's wheelhouse.
Arcuri reiterated his belief that Apple is working on a self-designed modem for 2021, and that Intel should sell its modem operation, possibly even to its current largest client, Apple. iPhones are now almost entirely based on Intel modems, the only exceptions being to skirt bans because of the ongoing legal war between Apple and Qualcomm.
Apple has reportedly been restructuring its internal hardware teams, possibly with a 5G modem in mind. Senior VP of hardware technologies Johny Srouji is allegedly overseeing that modem design, but it's unknown how far along development might be. Apple has been designing other chips for about a decade, such as A-series processors and W-series wireless modules.
Intel's 5G model will appear first in backbone and other commercial gear in 2019. The first consumer phones with Intel 5G modems are expected in 2020, which casts doubt on UBS claims. To be in an iPhone however, modem samples will have to arrive in time for testing, integration, and optimization, and at present it isn't clear where Intel and Apple are on that timeline.
Tangentially, Arcuri said that UBS is estimating that about 470 million of the 900 million iPhones in Apple's install base are "firsthand" purchases, "and thus the proper denominator against which to estimate upgrade rate." The firm calculates that of 204 million iPhones sold in 2018, 140 million were upgrades, giving Apple a rate of 3.4 years.
"While it is possible/likely this continues to lengthen, AAPL remains steadfast in its estimate that actual upgrade rates are [less than] 3 yrs which suggest we are now actually below full replacement rates - a factor which should soften any potential impact from the lack of a true 5G phone in 2020," the analyst commented.
He estimated that there could be as many as 185 million iPhone 5, 5s, 5c, SE, 4S, and 4 units in use, most of them secondhand, though they could be a "big opportunity over the coming years maybe catalyzed by creative lease/service offerings."
Today, the "realistic pool for services engagement" is between 500 and 600 million iPhones, Arcuri said, arguing that penetration by Apple TV Channels and Apple TV+ will be "deeper and faster" than Apple Music.
UBS is holding a "buy" rating for Apple stock with a $215 price target.
Comments
i was here and recall both the people complaining about a lack of coverage in an area and not wanting cell towers to ruin their neighborhood views, to the legal red tape that made new towers in SF hard to pass to the relatively easy cities like Houston.
Will the 5G networks even be ready by then? I barely have 4G where I live (USA). Sometimes get dropped to EDGE. my guess is there’s plenty of time to get 5G in phones. But I’m far from an expert on the matter.
”penetration... deeper and faster” 🤨🙄😑
also, AI, do you have a misslinked word there?
I still say all of this 5G hype is part of Qualcomm’s plan to hammer Apple and the carriers plan to raise your currrent rate of your data plan.
Fool me twice.
This is a pricey adventure and I want to make sure before I layout $1500-$2000 the device is 5G capable.
Apple could solve this problem quite easily if they could sort out their problems with Qualcomm.
I agree the 5G infrastructure isn’t there yet. But Apple needs to have their devices 5G ready so it’s only a matter of a iOS update to turn it on.
Figure it out Apple, sooner than later!!!😡
I think there is more likely an “understanding” that Apple will buy Intel’s business after the lawsuits are resolved. My question is want else is tied to this “understanding”? My bet is an “under the table” agreement for X number of years with Intel processors being used in Apple’s non-laptop machines...
So yes, history is doomed to repeat, in ever shorter cycles. I believe it is called progress...
- Greater speed - full LTE speeds are sufficient to stream 4k video (which is actually overkill on a cell phone, anyway, but may be useful on a tablet) Also, I've seen reports stating that "90% of the 5G in the next several years will be 3.5GHz with speeds comparable to LTE."
- Less latency - useful for real time control of a car and remote surgical operations, but we're not using our iPhones for that. Gaming and remote drone operation are the two applications I can possibly see this being useful for. I'm not sure how big the real-time gaming market is on mobile phones, but it strikes me as being pretty small. Ditto the number of people who need that kind of responsiveness for drones. Later generation LTE is capable of latencies less than 10 msec which is more than adequate for 99% of people.
- IoT - everyone keeps mentioning internet of things but I haven't seen how 5G is necessary for this other than it allowing more connections. More importantly, I don't see how this directly impacts use of a mobile phone. Your refrigerator can connect on 5G and your phone on 4G.
- Self-driving cars - reportedly need the speeds and decreased latency. This is like the IoT argument. just because your car needs 5G doesn't' mean your mobile phone does.
The only possible advantage I can see in the near term is if the increased bandwidth actually allows your phone to achieve speeds in congested areas where it couldn't with 4G. I'm guessing on this one, though, as I've never actually seen anyone talk about this. There may be applications developed in the future for which phones need 5G, but those are going to be years away. For now 4G LTE is just fine.PS: Personally, I'm more interested in Apple's patent that could allow ad-hoc piggybacking between devices that aren't near a cell tower. If I could be out in a national park where there is little to no coverage, but enough people that even an iMessage could hop from iPhone to iPhone until it reaches a cell tower that would be very useful for me.
If Apple can’t have a phone ready by September, they’ll have to adjust their annual (Sept) rollout schedule because otherwise that means 2021 for them - and many people won’t wait around. Apple may never recover their lost customers if they wait till 2021.
Again, this is not a technical issue but a supplier issue. Other phones will have 5G. Lots of them.
https://apple.news/Al4xBgbk5S4WY8iAOkCGq0g
That’s a lot faster than my cable. I don’t see what your problem is.
.... Oh! Apple won’t have a phone. Got it.