Apple takes hit as potential new 5G iPhone could be delayed to next year

Apple takes hit as potential new 5G iPhone could be delayed to next year

 

 

Apple (NASDAQ: AAPL) is known for a few critical points that, over the years; has propelled it from a company on its last legs to full-on superstardom.

 

Its tendency to push the envelope on design, its wild patents that never seem to actually see daylight; and its frequent updates are all part of that new Apple mystique that’s shown up in the last few years. Those frequent updates may be about to take a hit, though; and Apple stock recently dropped a notch on news that the new 5G iPhone may not show up this year; after all.

 

 

Even The Consideration of Delay Was Enough

The reports emerged suggesting that Apple was considering—it hadn’t actually pulled the trigger—delaying the annual release of its latest iPhone by a period of months. The word was sufficient to not only pull the stock off its highs for the day—Apple stock had hit $257.89 during trading yesterday. But it gave back all those gains to close down just over half a percent to $245.52. It’s since recovered those losses, trading at $248.11 as of this writing; though that’s still off today’s high of $249.36 so far.

 

The cited cause for the delay isn’t one of supply; as might be expected given that the coronavirus hit China first, but rather one of consumer demand. Apple believes that demand might be impacted by the coronavirus, and as such; is considering holding off on release until things can calm down and get back to an approximation of normal.

 

Moreover, Apple knows the threat under which it labours.

 

Since this is to be the first-ever iPhone to support 5G connectivity; there’s a particular pressure on this device to get it right. The new iPhone must be a hit, and if it isn’t, then there will likely be substantial problems later.

 

 

A Delay Already Seen Coming

With September—or possibly October—only a few months out; Apple really needs all hands on deck to prepare for a 5G iPhone launch.  Nevertheless, many of those hands are currently working from home, however; that may not be quite the unified front that Apple wanted to project.

 

The reports that suggested a delay may be forthcoming also indicated that Apple may not be able to even get its plans together until the shelter-in-place order over California is lifted, one way or another.

 

What’s more, JP Morgan analysts had already suggested that Apple could delay the launch of its new smartphone by possibly two months. Susquehanna’s suggestion of 5G iPhones a year from January looks especially prescient now. Thus, the new reports only join a growing chorus that suggest new delays may be coming. Apple itself is keeping mum on this front.

 

 

ALSO READ: Apple limits online iPhone purchases to two per person amid coronavirus

 

 

Troubles on Both Ends

News of Apple considering a delay really aren’t that out of line. Looking at the smartphone market, it’s easy to see why Apple’s considering pulling back a bit. After all, not only is its supply chain only barely starting to come back online—and a full restart hinges on the notion that no further coronavirus issues will rear their collective head in China, a bit of a long shot—but demand is also somewhat hurt as well.

 

With unemployment in many of Apple’s key demand markets on the rise, and supply only just starting to turn around, it’s not surprising to hear that smartphone shipments are down 38% for February in year-to-year comparisons. Sure, those unemployment spikes may be short-term—especially if the United States starts getting back to work as quickly as some hope—but there’s a potential that damage may already have been done.

 

A Crucial Time for Apple

This upheaval in the markets comes at a terrible time for Apple. The launch of the 5G iPhone was supposed to be a big deal for Apple, something to draw away complaints about how the Apple line just isn’t looking all that innovative any more. There were already signs seen previously that people aren’t getting behind the idea of buying a new iPhone every year as it was, and if the 5G iPhone gets delayed, then that could reinforce the concept and keep people increasingly out of the market.

 

Additionally, there’s also the issue of 5G access to consider. A look at Ookla’s 5G map, updated weekly, suggests that points are coming online, but access is still spotty at best. Verizon (NYSE: VZ) is still expressing it in terms of major cities that can connect.

 

A delay in Apple’s new launch would likely be disastrous for the company, but even if it does launch, the possibility that it will be the hit Apple needs right now is a bit murky. This may not end well for Apple regardless of what direction it takes.

 

 

 

 

SOURCE: MARKETBEAT

About The Author

Lilian Osigwe

Osigweh Lilian Oluchi is a graduate of the University of Lagos where she obtained a B.A (Hons) in English, Masters in Public and International affairs (MPIA). Currently works with 1stnews as a Database Manager / Writer. lilian.osigweh@1stnews.com

Related posts

Leave a Reply

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