Jefferies equity analyst Kyle McNealy thinks that the arrival of a 5G iPhone is going to be much bigger for Apple than Wall Street realizes.
The first 5G iPhones are set to arrive toward the end of 2020. McNealy thinks that in the following year, 2021, Apple will sell 208 million iPhones. That’s well above the 190 million total handset sales Wall Street estimates are predicting.
“We think the Street underestimates the benefit Apple gets from this heading into the 5G cycle,” McNealy wrote in a Tuesday note to clients. McNealy took over coverage of Apple from predecessor Tim O’Shea.
According to TF International Securities analyst Ming-Chi Kuo, Apple will debut multiple 5G handsets in 2020. This will offer a considerable connectivity speed boost over 4G.
Wall Street’s consensus prediction of 190 million iPhones in 2021 would be 9% below the six-year average unit volume for the iPhone.
“Given the advanced technology and components, 5G devices will be high-end devices (where Apple holds dominant share),” McNealy wrote. He also noted that “the marketing machines at every wireless operator will be driving a 5G message with consumers.”
McNealy’s price target for Apple is $260. At time of writing, AAPL is trading at $220.
Will 5G be a big leap for Apple?
Apple’s first 4G iPhone came in 2012 with the arrival of the iPhone 5. That year, Apple saw a considerable jump in iPhone sales. According to this analysis of year-by-year sales, Apple experienced one of its biggest ever jumps in iPhone sales in 2012.
A lot has changed in the smartphone industry since then. But it seems likely that next year’s iPhone cycle is going to be a big one.
Are you holding on for a 5G iPhone? Do you expect this to be a big selling point for Apple? Let us know your thoughts on this subject in the comments below.