iPhone 5G to Drive Final 2020 Apple Growth

Nikkei Asian Review September 9, 2020 07:08 JST |TECHNOLOGY| “Apple to start producing first 5G iPhones in Mid-September” “Tech giant shortens delay but could still miss 80 million target for 2020” By Lauly Li & Cheng Ting-Fang.

Illustration credit macrumors.com

Summary of Reference

Apple like other global companies is coping with COVID-related travel challenges and other restrictions. As a consequence, new 5G iPhone production was delayed only to start now in mid-September. With the Annual Launch planned for Tuesday September 15, Apple will be building the month-delay into their distribution timeline. Already the impact of COVID has reportedly resulted in reducing component orders to 80 million from an original plan of 100 million. Some industry observers believe less than 75 million 5G iPhones will be produced by end of 2020 with the rest to follow in early 2021.

Four 5G iPhone models are planned; all with OLED displays (Organic Light Emitting Diode) and screen sizes of 5.4, 6.1 and 6.7 inches. The lowest priced 6.1 inch unit is expected to account for 40% of sales. The most expensive 6.7 5G iPhone includes the triple camera.

Delays were caused partly by the complexity of transitioning from 4G to 5G, and partly by COVID restrictions-more remote collaboration slowed both engineering verifications and design sign-offs. To maintain secrecy regardng the new iPhones, “final samples to U.S. were packed in large boxes", securely transferred to Hong Kong, and flown direct to California. Final iPhone assembly will be at Foxconn, Pegatron and Wistron in China.

Unlike other makers, despite the pandemic, Apple shipments were up 11.2% YOY for the quarter April-June. Apple was able to benefit from COVID by resourcing the increase in remote work and learning. Without delay they boosted production of new and old models of iPads and are targeting 27 million units in Q4 2020. In other news, the latest MacBooks will premiere the in-house CPU. New versions of HomePod and Apple Watch are are also expected this year. Regardless, Apple expects demand for the 5G iPhone to be the key driver of sales growth-2020 (190 million units) and 2021 (215 million units).

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