TipRanks

Notifications

Apple Doubles Down On 5G iPhone Mass Production- Report

Apple (AAPL) is urging its suppliers to limit production delays for its first 5G iPhones as it tries to minimize the fallout from the coronavirus pandemic, the Nikkei Asian Review reports.

According to the publication’s sources, Apple is facing delays of four weeks to two months for mass production of its four 5G models. This is because of Covid-19 related factory lockdowns and workplace absences.

However, Apple and its suppliers are now working round the clock to make up for lost time, and as a result, the launch is now less likely to be postponed until 2021, the situation it was in three months ago, the Nikkei sources added.

“What the progress looks like now is months of delay in terms of mass production, but Apple is doing everything it can to shorten the postponement. There’s a chance that the schedule could still be moved ahead,” a source said.

Indeed, some of Apple’s hardware development team returned to the California head office last month to try and maintain the typical mid-late September timeframe, according to a person familiar with the matter.

At the same time, AAPL has ordered 45 million units of the older models for the second half of 2020, in case of any delays to the new 5G iPhones, sources told Nikkei.

Apple previously ordered 100 million 5G iPhone components for 2020, but reduced this target to a still-significant 80 million units citing the impact from the coronavirus.

Shares in Apple have rallied 24% year-to-date, and analysts have a bullish Strong Buy consensus on the stock’s outlook. However due to the recent rally, the $352 average analyst price target now indicates downside potential of 4%. (See Apple stock analysis on TipRanks).

“Although there has been some noise about the 5G component of this iPhone product cycle, we are hearing from suppliers this launch globally and within the US is right on target and sets the stage for Apple to go after this transformational multi-year 5G market opportunity” writes Wedbush analyst Daniel Ives. He has a buy rating on the stock and $425 price target.

He believes there are 4 models being launched for iPhone 12 with a mix of 4G/5G with price points that potentially could be lower than $1,000 on some versions despite the additional 5G component.

According to Ives, there will be a US and non-US version introduced for 5G. The US version will have mmWave technology after some technology wrinkles appear to have been ironed out by Apple and its suppliers over the last month, Ives added.

“We maintain our Outperform rating with Apple being our favorite name to play the 5G theme and strongly believe a further re-rating of Apple’s stock is on the horizon” the analyst concludes.

Related News:
Apple’s App Ecosystem Generated Over Half A Trillion Dollars In 2019
Amazon’s ‘Crucible’ Game Retreats Back To Closed Beta
Google Snaps Up Canadian Smart Glasses Startup North

Tags: ,

Leave a Reply

Your email address will not be published. Required fields are marked *

Leave a Reply

Your email address will not be published. Required fields are marked *