Raymond James upgrades Apple stock to $250 on 2020 iPhone promise
Apple's use of a 5G modem in the 2020 iPhone could trigger high sales for the smartphone generation, Raymond James suggested while upgrading their rating of Apple shares, but the firm is still concerned the 2019 cycle will be "the weakest in years."
On Thursday, Raymond James advised to investors it has upgraded Apple's shares from "market perform" to "outperform," as well as setting a price target of $250 for the iPhone maker. The decision was largely driven by the potential of the 2020 iPhone, which is set to include a 5G modem.
Analysts at the company have "increased conviction in the impact of a 5G iPhone product cycle in 2020," reports CNBC, in part due to the settlement between Apple and Qualcomm that will allow the use of the latter's modems.
"Our more recent checks suggest that Apple plans to bring 5G to a wider range of iPhone models, which is different from their plan when they had intended to use Intel's modem," the firm believes.
Raymond James does temper the expectations, warning "Our call may well be early - we expect this year's iPhone cycle to be the weakest in years, and today may not be the right time to buy ahead of that weakness. But since the near-term moves are being driven by macro conditions as much as fundamentals, we've decided to upgrade now and let our clients decide the best time to execute on our idea."
Du to the introduction of 5G across many carriers around the world, and the slow influx of 5G devices, analysts are generally predicting poor sales of the 2019 iPhones, which are not expected to have 5G. It is thought consumers may wait until Apple ships models using the cellular standard before upgrading, which may affect 2019 sales.
Apple is thought to be working on its own 5G modem, but an iPhone using it may not be released until 2022 or 2023.
Aside from 5G, the 2020 iPhone is thought to include three OLED models instead of two OLED and one LCD, and is also tipped to include a smaller notch at the top of the display.
On Thursday, Raymond James advised to investors it has upgraded Apple's shares from "market perform" to "outperform," as well as setting a price target of $250 for the iPhone maker. The decision was largely driven by the potential of the 2020 iPhone, which is set to include a 5G modem.
Analysts at the company have "increased conviction in the impact of a 5G iPhone product cycle in 2020," reports CNBC, in part due to the settlement between Apple and Qualcomm that will allow the use of the latter's modems.
"Our more recent checks suggest that Apple plans to bring 5G to a wider range of iPhone models, which is different from their plan when they had intended to use Intel's modem," the firm believes.
Raymond James does temper the expectations, warning "Our call may well be early - we expect this year's iPhone cycle to be the weakest in years, and today may not be the right time to buy ahead of that weakness. But since the near-term moves are being driven by macro conditions as much as fundamentals, we've decided to upgrade now and let our clients decide the best time to execute on our idea."
Du to the introduction of 5G across many carriers around the world, and the slow influx of 5G devices, analysts are generally predicting poor sales of the 2019 iPhones, which are not expected to have 5G. It is thought consumers may wait until Apple ships models using the cellular standard before upgrading, which may affect 2019 sales.
Apple is thought to be working on its own 5G modem, but an iPhone using it may not be released until 2022 or 2023.
Aside from 5G, the 2020 iPhone is thought to include three OLED models instead of two OLED and one LCD, and is also tipped to include a smaller notch at the top of the display.
Comments
For the real world, they want a phone that won't obsolete itself a third or quarter of the way through its life-span.
On the other hand, while it is clear that Apple will not be able to include a 5G capable modem in the phones it rolls out in 2 months, there is not much basis to assume that Apple will delay that roll-out for another 14 months -- simply to stick to some preordained schedule.
Currently, the only technical reason for not having a 5G capable phone is being able to incorporate Qualcomm's 5G capable modem into one or more of their phones. But that limitation is minor and short lived. After that, the only road blocks will be administrative and marketing policies -- and Apple, historically, has trampled all over that nonsense.
5G will require a unlimited plan. The carriers know this.
On the other hand, for home broadband in areas not well served by hardwires, 5G could be a gamechanger. If people are willing to install rooftop antennae (probably no big deal for many as witnessed by the huge number of directTV antennae one sees), they could finally get real broadband (50+) and the infrastructure builds are far easier than laying cable. They move lose signal in the rain, etc. but to get real broadband even part of the time is better than none.
Most of the problems of 5G (big chipsets, awkward antenna requirements, power consumption) fall away in a fixed installation setting. Recall that 22% of US broadband users rely on DSL and that there are an additional 20% of homes without even DSL as "broadband". We could see US broadband penetration grow by 10-20% once 5G is built out, with attendant growth for broadband reliant services (netflix, etc.).
Apple was never first to new cellular technology.
Remember when pundits said the iphone 4S was going to be a disappointment because it didn’t support 4G LTE and in the first 3 days of its release sold 4 million phones.
Another advantage of not being first is a better position for customers not paying for the privilege of being early adopters of new wireless technology.
With the hesitation of using Chinese based companies that make the 5G network equipment, I believe that the rollout is going to take even longer than before.
Personally, the only reason I'd want 5G is if the radios worked better over a longer range and through objects, as well as using less overall power by being able to grab data and then power down more quickly, but none of that seems to be the case.
edit: Completely misread your comment. As JanNL pointed out, you were saying these are the things you'd like from 5G. Apologies.
Dictionary: “no longer produced or used”. Neither is true when there is simply more/faster/better available.
Cant believe I have to still explain this to people... The delta of an annual improvement from the model of a year prior isn’t very important. Normals don’t upgrade phones every single year, as there is often little reason to. Techies and phone nerds like to, but that doesn’t represent normal. Normals upgrade when they need a new phone, and for that reason it’s important that the current-model do its job well. iPhone does that, every single year. It also gets incrementally better, which, over time, produces a dramatic delta compared to a much older model.
Can’t believe some people still fail to grasp this.
More, you’re getting hung up on modems or shell design while ignoring the true annual improvements — the A-series processors. It is the device’s processing ability which enables iOS to take on more jobs to do, and do them very well. In the end it’s the UX and jobs to be done that normals need, and iPhone doesn’t fail to deliver, despite what the “speeds & feeds” spec worshippers claim.
Oh but it’s very big in Spain! lol