5G iPhone impact underestimated by investors & analysts, says Jefferies analyst

Posted:
in AAPL Investors
Investors are being too conservative in their guesses of how much impact 5G will have on the iPhone's sales in the coming years, a Jefferies analyst suggests, with Wall Street apparently underestimating how many people will upgrade their devices to take advantage of the communications technology.

Qualcomm's 5G hardware for smartphones
Qualcomm's 5G hardware for smartphones


The iPhone is currently anticipated to have a major upgrade in 2020 to enable it to connect using 5G, using modems sourced from Qualcomm as part of an agreement to end legal battles between Apple and the chip producer. While the iPhone 11, iPhone 11 Pro, and iPhone 11 Pro Max all use Intel modems, it seems the first opportunity to use Qualcomm modems will be in the 2020 models, and serves as a prime opportunity to introduce 5G support at the same time.

While some analysts have offered favorable opinions on the 5G cycle, new Jefferies Apple analyst Kyle McNealy advised to investors on Tuesday that the opinions are still too low. McNealy takes over Apple coverage for Jefferies from Tim O'Shea.

"We think the Street underestimates the benefit Apple gets from this heading into the 5G cycle," the note insists.

While Wall Street consensus puts Apple at 190 million iPhone units sold for the 2021 fiscal year, Jefferies suggests the amount is low, 9% below the 6-year unit shipment average for iPhone product cycles. In Jefferies' opinion, the forecast should be closer to 208 million units sold for 2021.

Part of the problem is where analysts are failing to take into account the amount of iPhones that need upgrading for that cycle. Jefferies suggests that, even if there is a three-year upgrade cycle for consumers, the demand will still be there.

Marketing will also be a big factor for the iPhone, with carriers in general "driving a 5G message with consumers," something Apple will be able to take advantage of in the coming years.

Jefferies also points out the possibility a 5G iPhone will be drastically different. "Given the advanced technology and components, 5G devices will be high-end," writes McNealy, with Apple currently dominating that sector.

Along with the sales of iPhones, Services are also a major revenue contributor according to the firm. It is estimated by Jefferies that Apple will earn $38 in revenue per active device for fiscal 2020, up from $25 for fiscal 2017 and representing 14% growth.

For fiscal 2020, and assuming the influx of iPhone sales stems from "mostly new iPhone users," Apple stands to earn $342 million in annual services revenue off the 9 million unit difference alone, which is "almost a point of services growth." Services revenue will apparently make up 20% of sales and 38% of operating profit for the 2020 financial year.

Jefferies has set a target of $260 on Apple's shares, making it one of the highest targets among Apple analysts.
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Comments

  • Reply 1 of 31
    MplsPMplsP Posts: 1,728member
    "Analyst says he's right and other analysts are wrong"
    thtbeowulfschmidt
  • Reply 2 of 31
    lkrupplkrupp Posts: 7,463member
    Meanwhile there’s an article about a protest movement in Sweden that seeks to ban the deployment of 5G because of health concerns. I’m sure something like this will make its way to your town soon 
  • Reply 3 of 31
    avon b7avon b7 Posts: 4,302member

    "Jefferies also points out the possibility a 5G iPhone will be drastically different. "Given the advanced technology and components, 5G devices will be high-end," writes McNealy, with Apple currently dominating that sector."

    This is where big doubts creep in on his knowledge on the 5G state of play for 2020:

    https://www.androidauthority.com/huawei-cheap-5g-phones-2020-1031206/



    muthuk_vanalingam
  • Reply 4 of 31
    robjnrobjn Posts: 248member
    5G is massively over-estimated.

    It’s an extremely limited technology that offers no new high value or behavior changing application. Compare this to 4G - which made streaming video possible or 3G that made the internet usable. These were extremely valuable leaps that changed people’s lives significantly. What does 5G offer? The ability to download very large files quickly? What else?

    Even if 5G does offer some valuable new ability that is meaningful to everyone. There is a critical flaw with the technology. It covers such short distances it will never work widely outside of densely populated areas - this means that it cannot be relied on for any meaningful new service - this is a critical flaw!

    These Wall Street analysts are very simply looking back on 3G and 4G and assuming this is the same thing - it is not!
    StrangeDays
  • Reply 5 of 31
    robjn said:
    5G is massively over-estimated.

    It’s an extremely limited technology that offers no new high value or behavior changing application. Compare this to 4G - which made streaming video possible or 3G that made the internet usable. These were extremely valuable leaps that changed people’s lives significantly. What does 5G offer? The ability to download very large files quickly? What else?

    Even if 5G does offer some valuable new ability that is meaningful to everyone. There is a critical flaw with the technology. It covers such short distances it will never work widely outside of densely populated areas - this means that it cannot be relied on for any meaningful new service - this is a critical flaw!

    These Wall Street analysts are very simply looking back on 3G and 4G and assuming this is the same thing - it is not!
    Exactly what I am thinking. I'll upgrade to an 11. And if 5G is THAT important I'll trade in my 11 in and get a 12. But I'd never jump to Android to get 5G.  And the average person on the street doesn't care. They want tech that works, that look decent, that behaves like they'd expect. A lot of analysts just look for something to take Apple down with and this is the reason duJour. 
    StrangeDays
  • Reply 6 of 31
    avon b7avon b7 Posts: 4,302member
    robjn said:
    5G is massively over-estimated.

    It’s an extremely limited technology that offers no new high value or behavior changing application. Compare this to 4G - which made streaming video possible or 3G that made the internet usable. These were extremely valuable leaps that changed people’s lives significantly. What does 5G offer? The ability to download very large files quickly? What else?

    Even if 5G does offer some valuable new ability that is meaningful to everyone. There is a critical flaw with the technology. It covers such short distances it will never work widely outside of densely populated areas - this means that it cannot be relied on for any meaningful new service - this is a critical flaw!

    These Wall Street analysts are very simply looking back on 3G and 4G and assuming this is the same thing - it is not!
    It will be a game changer on many fronts but just like now, all the pieces have to be in place.

    Today 5G phones and networking equipment are being rolled out. There will be important changes ahead that go beyond handsets.

    https://www.newequipment.com/industry-trends/managing-big-data-flood

    In healthcare:

    https://www.businessinsider.com/5g-surgery-could-transform-healthcare-industry-2019-8

    5G in intensive care units combined with monitoring devices and AI will vastly improve emergency attention.
    edited September 24 chemengin1
  • Reply 7 of 31
    thttht Posts: 3,316member
    If the same carrier data cap deals exist for 5G as they do for 4G, I don’t see 5G doing much of anything for handset sales. By data cap deals, I mean deals like “unlimited, but bandwidth throttled after 50 GB per month” or “20 GB per month for 3 phones”. 

    It’s an industry where they want have the most revenue possible from their subscribers for the least usage of the network possible. Why would customers upgrade if they don’t have anything gain?

    hmlongcoDeelron
  • Reply 8 of 31
    I do feel their is pent up demand for a 5G iPhone. If it was released this year it would be premature, but hopefully by Christmas 2020 their will be significant rollout of the 5G infrastructure.

    I’m with T-Mobile and the network has gone to @#$ for LTE.  My hope is my suffering is temporary, and that T-mobile’s efforts ($$$) are on the 5G rollout.  Either people will migrate to 5G freeing up bandwidth /reducing congestion on LTE... or I’ll be upgrading to 5G to leave the issues behind.  The question is will I still be with T-mobile by then...
  • Reply 9 of 31
    The above post by Tht is correct. Having 5G connection speed is meaningless when all it means is that you can blow through your entire data plan in less than a minute.

    And knowing our esteemed US carriers, they'll roll it out piecemeal all while pricing the service as high as possible.

    All of which means that penetration rates are not going to be very high for quite a few years...
  • Reply 10 of 31
    If I would have money and will be willing to pay that much for phone I will have that money next year as well and will sell my old handset and buy new in case 5G will become usable/price effective simple reasonable. Only drawback can be that resell value of iPhone without 5g will be lower in long term..
  • Reply 11 of 31
    avon b7 said:
    robjn said:
    5G is massively over-estimated.

    It’s an extremely limited technology that offers no new high value or behavior changing application. Compare this to 4G - which made streaming video possible or 3G that made the internet usable. These were extremely valuable leaps that changed people’s lives significantly. What does 5G offer? The ability to download very large files quickly? What else?

    Even if 5G does offer some valuable new ability that is meaningful to everyone. There is a critical flaw with the technology. It covers such short distances it will never work widely outside of densely populated areas - this means that it cannot be relied on for any meaningful new service - this is a critical flaw!

    These Wall Street analysts are very simply looking back on 3G and 4G and assuming this is the same thing - it is not!
    It will be a game changer on many fronts but just like now, all the pieces have to be in place.

    Today 5G phones and networking equipment are being rolled out. There will be important changes ahead that go beyond handsets.

    https://www.newequipment.com/industry-trends/managing-big-data-flood

    In healthcare:

    https://www.businessinsider.com/5g-surgery-could-transform-healthcare-industry-2019-8

    5G in intensive care units combined with monitoring devices and AI will vastly improve emergency attention.
    And doctors will arrive in flying cars. Cool
    story, bro. 
    MplsPtmayAppleExposed
  • Reply 12 of 31
    MplsPMplsP Posts: 1,728member
    robjn said:
    5G is massively over-estimated.

    It’s an extremely limited technology that offers no new high value or behavior changing application. Compare this to 4G - which made streaming video possible or 3G that made the internet usable. These were extremely valuable leaps that changed people’s lives significantly. What does 5G offer? The ability to download very large files quickly? What else?

    Even if 5G does offer some valuable new ability that is meaningful to everyone. There is a critical flaw with the technology. It covers such short distances it will never work widely outside of densely populated areas - this means that it cannot be relied on for any meaningful new service - this is a critical flaw!

    These Wall Street analysts are very simply looking back on 3G and 4G and assuming this is the same thing - it is not!
    There are different components to 5G. The mmwave length you're talking about has very poor penetration and poor distance coverage. Other components gain improvements using the existing spectrum. With 3G and 4G it was more black and white - either you had it or you didn't .  With 5G it's not so simple.

    Your overall point still applies, though. In the near term, once you sort through the hype there is virtually nothing you can do with 5G that you can't do with a good 4G signal. Beyond that, if you look at the history of technology roll-outs, without exception they have taken longer to be widely available and fallen short of the hype and promises made before their introduction. I see no reason too expect 5G will be any different.


    tmay
  • Reply 13 of 31
    MplsPMplsP Posts: 1,728member
    avon b7 said:
    robjn said:
    5G is massively over-estimated.

    It’s an extremely limited technology that offers no new high value or behavior changing application. Compare this to 4G - which made streaming video possible or 3G that made the internet usable. These were extremely valuable leaps that changed people’s lives significantly. What does 5G offer? The ability to download very large files quickly? What else?

    Even if 5G does offer some valuable new ability that is meaningful to everyone. There is a critical flaw with the technology. It covers such short distances it will never work widely outside of densely populated areas - this means that it cannot be relied on for any meaningful new service - this is a critical flaw!

    These Wall Street analysts are very simply looking back on 3G and 4G and assuming this is the same thing - it is not!
    It will be a game changer on many fronts but just like now, all the pieces have to be in place.

    Today 5G phones and networking equipment are being rolled out. There will be important changes ahead that go beyond handsets.

    https://www.newequipment.com/industry-trends/managing-big-data-flood

    In healthcare:

    https://www.businessinsider.com/5g-surgery-could-transform-healthcare-industry-2019-8

    5G in intensive care units combined with monitoring devices and AI will vastly improve emergency attention.
    and this has nothing to do with smart phones. I'm not performing remote surgery with my iPhone, nor am I driving a car remotely. Nor can my car drive itself. Everyone is all worried about whether the iPhone has 5G, but practically none of the purported benefits/uses of 5G applies to a smart phone.
    tmayStrangeDays
  • Reply 14 of 31
    5G is OVERRATED. I REPEAT- who cares. 
  • Reply 15 of 31
    avon b7avon b7 Posts: 4,302member
    avon b7 said:
    robjn said:
    5G is massively over-estimated.

    It’s an extremely limited technology that offers no new high value or behavior changing application. Compare this to 4G - which made streaming video possible or 3G that made the internet usable. These were extremely valuable leaps that changed people’s lives significantly. What does 5G offer? The ability to download very large files quickly? What else?

    Even if 5G does offer some valuable new ability that is meaningful to everyone. There is a critical flaw with the technology. It covers such short distances it will never work widely outside of densely populated areas - this means that it cannot be relied on for any meaningful new service - this is a critical flaw!

    These Wall Street analysts are very simply looking back on 3G and 4G and assuming this is the same thing - it is not!
    It will be a game changer on many fronts but just like now, all the pieces have to be in place.

    Today 5G phones and networking equipment are being rolled out. There will be important changes ahead that go beyond handsets.

    https://www.newequipment.com/industry-trends/managing-big-data-flood

    In healthcare:

    https://www.businessinsider.com/5g-surgery-could-transform-healthcare-industry-2019-8

    5G in intensive care units combined with monitoring devices and AI will vastly improve emergency attention.
    And doctors will arrive in flying cars. Cool
    story, bro. 
    Hey, no problem! 

    Huawei is investing in flying taxis AND the software AND the hardware to cover it.

    It is pushing for an international framework to make everything that is airborne (up to 300m) controlled and safe. LOL!

    There you go, bro. Another 5G plus.

    I know Huawei isn't alone with its thinking. Amazon? Musk? Apple? No idea.

    Now, how long before drones fly injured people to hospital while onboard AI keeps them looked after on their way?

    Yep. It's a cool story. It's coming but will rely on 5G to pull it off. It won't be tomorrow, that's for sure but we will live to see it.


    chemengin1muthuk_vanalingam
  • Reply 16 of 31
    avon b7avon b7 Posts: 4,302member
    MplsP said:
    avon b7 said:
    robjn said:
    5G is massively over-estimated.

    It’s an extremely limited technology that offers no new high value or behavior changing application. Compare this to 4G - which made streaming video possible or 3G that made the internet usable. These were extremely valuable leaps that changed people’s lives significantly. What does 5G offer? The ability to download very large files quickly? What else?

    Even if 5G does offer some valuable new ability that is meaningful to everyone. There is a critical flaw with the technology. It covers such short distances it will never work widely outside of densely populated areas - this means that it cannot be relied on for any meaningful new service - this is a critical flaw!

    These Wall Street analysts are very simply looking back on 3G and 4G and assuming this is the same thing - it is not!
    It will be a game changer on many fronts but just like now, all the pieces have to be in place.

    Today 5G phones and networking equipment are being rolled out. There will be important changes ahead that go beyond handsets.

    https://www.newequipment.com/industry-trends/managing-big-data-flood

    In healthcare:

    https://www.businessinsider.com/5g-surgery-could-transform-healthcare-industry-2019-8

    5G in intensive care units combined with monitoring devices and AI will vastly improve emergency attention.
    and this has nothing to do with smart phones. I'm not performing remote surgery with my iPhone, nor am I driving a car remotely. Nor can my car drive itself. Everyone is all worried about whether the iPhone has 5G, but practically none of the purported benefits/uses of 5G applies to a smart phone.
    Yes, I know. The point is to see beyond the typical telecommunications/phone viewpoint.

    Your phone will be just like it is today but more of a control hub than it currently is.

    We are going to see a rise in sensors in our lives. Many are already on phones, watches and other devices but there will be more and they will tie in with other sensors in a way that isn't possible over 4G.




    muthuk_vanalingam
  • Reply 17 of 31
    tmaytmay Posts: 3,982member
    avon b7 said:
    avon b7 said:
    robjn said:
    5G is massively over-estimated.

    It’s an extremely limited technology that offers no new high value or behavior changing application. Compare this to 4G - which made streaming video possible or 3G that made the internet usable. These were extremely valuable leaps that changed people’s lives significantly. What does 5G offer? The ability to download very large files quickly? What else?

    Even if 5G does offer some valuable new ability that is meaningful to everyone. There is a critical flaw with the technology. It covers such short distances it will never work widely outside of densely populated areas - this means that it cannot be relied on for any meaningful new service - this is a critical flaw!

    These Wall Street analysts are very simply looking back on 3G and 4G and assuming this is the same thing - it is not!
    It will be a game changer on many fronts but just like now, all the pieces have to be in place.

    Today 5G phones and networking equipment are being rolled out. There will be important changes ahead that go beyond handsets.

    https://www.newequipment.com/industry-trends/managing-big-data-flood

    In healthcare:

    https://www.businessinsider.com/5g-surgery-could-transform-healthcare-industry-2019-8

    5G in intensive care units combined with monitoring devices and AI will vastly improve emergency attention.
    And doctors will arrive in flying cars. Cool
    story, bro. 
    Hey, no problem! 

    Huawei is investing in flying taxis AND the software AND the hardware to cover it.

    It is pushing for an international framework to make everything that is airborne (up to 300m) controlled and safe. LOL!

    There you go, bro. Another 5G plus.

    I know Huawei isn't alone with its thinking. Amazon? Musk? Apple? No idea.

    Now, how long before drones fly injured people to hospital while onboard AI keeps them looked after on their way?

    Yep. It's a cool story. It's coming but will rely on 5G to pull it off. It won't be tomorrow, that's for sure but we will live to see it.


    When you say "Huawei is investing in...", what I see is "the Chinese Government is investing in...".

    One and the same.
    StrangeDays
  • Reply 18 of 31
    avon b7avon b7 Posts: 4,302member
    tmay said:
    avon b7 said:
    avon b7 said:
    robjn said:
    5G is massively over-estimated.

    It’s an extremely limited technology that offers no new high value or behavior changing application. Compare this to 4G - which made streaming video possible or 3G that made the internet usable. These were extremely valuable leaps that changed people’s lives significantly. What does 5G offer? The ability to download very large files quickly? What else?

    Even if 5G does offer some valuable new ability that is meaningful to everyone. There is a critical flaw with the technology. It covers such short distances it will never work widely outside of densely populated areas - this means that it cannot be relied on for any meaningful new service - this is a critical flaw!

    These Wall Street analysts are very simply looking back on 3G and 4G and assuming this is the same thing - it is not!
    It will be a game changer on many fronts but just like now, all the pieces have to be in place.

    Today 5G phones and networking equipment are being rolled out. There will be important changes ahead that go beyond handsets.

    https://www.newequipment.com/industry-trends/managing-big-data-flood

    In healthcare:

    https://www.businessinsider.com/5g-surgery-could-transform-healthcare-industry-2019-8

    5G in intensive care units combined with monitoring devices and AI will vastly improve emergency attention.
    And doctors will arrive in flying cars. Cool
    story, bro. 
    Hey, no problem! 

    Huawei is investing in flying taxis AND the software AND the hardware to cover it.

    It is pushing for an international framework to make everything that is airborne (up to 300m) controlled and safe. LOL!

    There you go, bro. Another 5G plus.

    I know Huawei isn't alone with its thinking. Amazon? Musk? Apple? No idea.

    Now, how long before drones fly injured people to hospital while onboard AI keeps them looked after on their way?

    Yep. It's a cool story. It's coming but will rely on 5G to pull it off. It won't be tomorrow, that's for sure but we will live to see it.


    When you say "Huawei is investing in...", what I see is "the Chinese Government is investing in...".

    One and the same.
    Well, I know you like to say that but in truth there is nothing to support it. 

    Anyway, if you're interested in how cellular infrastructure can be used in civilian airspace and what telecos are looking at, here you are:

    http://www.mobilk.net/en-off/mobile-news-12-24764.html

    Of course, this isn't possible without 5G.
    muthuk_vanalingam
  • Reply 19 of 31
    tmaytmay Posts: 3,982member
    avon b7 said:
    tmay said:
    avon b7 said:
    avon b7 said:
    robjn said:
    5G is massively over-estimated.

    It’s an extremely limited technology that offers no new high value or behavior changing application. Compare this to 4G - which made streaming video possible or 3G that made the internet usable. These were extremely valuable leaps that changed people’s lives significantly. What does 5G offer? The ability to download very large files quickly? What else?

    Even if 5G does offer some valuable new ability that is meaningful to everyone. There is a critical flaw with the technology. It covers such short distances it will never work widely outside of densely populated areas - this means that it cannot be relied on for any meaningful new service - this is a critical flaw!

    These Wall Street analysts are very simply looking back on 3G and 4G and assuming this is the same thing - it is not!
    It will be a game changer on many fronts but just like now, all the pieces have to be in place.

    Today 5G phones and networking equipment are being rolled out. There will be important changes ahead that go beyond handsets.

    https://www.newequipment.com/industry-trends/managing-big-data-flood

    In healthcare:

    https://www.businessinsider.com/5g-surgery-could-transform-healthcare-industry-2019-8

    5G in intensive care units combined with monitoring devices and AI will vastly improve emergency attention.
    And doctors will arrive in flying cars. Cool
    story, bro. 
    Hey, no problem! 

    Huawei is investing in flying taxis AND the software AND the hardware to cover it.

    It is pushing for an international framework to make everything that is airborne (up to 300m) controlled and safe. LOL!

    There you go, bro. Another 5G plus.

    I know Huawei isn't alone with its thinking. Amazon? Musk? Apple? No idea.

    Now, how long before drones fly injured people to hospital while onboard AI keeps them looked after on their way?

    Yep. It's a cool story. It's coming but will rely on 5G to pull it off. It won't be tomorrow, that's for sure but we will live to see it.


    When you say "Huawei is investing in...", what I see is "the Chinese Government is investing in...".

    One and the same.
    Well, I know you like to say that but in truth there is nothing to support it. 

    Anyway, if you're interested in how cellular infrastructure can be used in civilian airspace and what telecos are looking at, here you are:

    http://www.mobilk.net/en-off/mobile-news-12-24764.html

    Of course, this isn't possible without 5G.
    Actually, we can never no, because their is no transparency in Huawei's business, but we do know that the CCP does have party cells inside Huawei;

    https://asia.nikkei.com/Opinion/Huawei-affair-growing-Communist-Party-role-in-China-s-big-tech

    "Huawei is in many ways a special company, and revered at home. It may shape China's innovation. Yet the gray lines between companies like Huawei and the party may damage their brands abroad. Meanwhile, the harder lines being drawn between millions of other private enterprises and the state sector may turn out to be ideologically correct, but commercially harmful."

     
    StrangeDays
  • Reply 20 of 31
    AppleExposedAppleExposed Posts: 1,687unconfirmed, member
    Imagine Apple being dumb enough to slap "5G" on iPhone boxes just to fool dumb people into thinking they now have 5G? Apple does what makes sense when it's ready.

    P.S. It didn't take long for him to mention that knockoff Apple company did it??
    StrangeDays
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