Why Gene Munster believes Apple’s 5G iPhone will launch on time

From “Fall iPhone Event Likely to Remain a Bedrock for Apple” mailed to Loup Ventures subscribers Wednesday evening:

The Nikkei Asian Review reported that Apple “is preparing the ground to possibly delay the launch of the first 5G iPhones … with a worst-case of delaying the launch until 2021,” given engineering and supply constraints. We have a different view and believe it’s likely Apple will host a fall iPhone 5G launch. Our thoughts:

    • It’s a misunderstanding that an iPhone is designed in a year. Johny Srouji, Apple’s head of Hardware Technologies has commented that engineers and designers can work on iPhone features for years in advance of the launch.
    • We estimate that it typically takes 3-4 years to take an iPhone from concept to launch. That implies that by the end of March in a given year, the vast majority of work on an iPhone design and planning with the supply chain is already done.
    • China manufacturing and assembly, including some of Apple’s most important partners like Taiwan Semiconductor (TSMC), are beginning to ramp production. Taking the view that China production will remain stable (which can quickly change), the supply chain should be positioned to supply several million iPhones by the end of September, in line with supply for previous launches…
    • We remain optimistic that, over the next five years, 5G’s impact on our lives will exceed its hype, and Apple is one of the best ways to invest in the transformation driven by 5G.

My take:  Short term, who knows? Medium term, Apple will be fine. Long term, we’re all going to die.

8 Comments

  1. Ralph McDarmont said:

    I would not be surprised if Apple already has warehouses stuffed to the ceiling with 5G phones. The company does not sit on its hands.

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    March 26, 2020
  2. Gregg Thurman said:

    That implies that by the end of March in a given year,

    That’s been exactly my point in opposition to every “delay” report from the usual suspects. NONE OF APPLE’S PRODUCTS ARE STILL IN DEVELOPMENT SIX MONTHS BEFORE LAUNCH.

    On another note: I bought AAPL shares today @ $253. I see volatility subsiding in the coming days/weeks with good upside potential, just not enough to trade options. better to make a little than to make nothing.

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    March 26, 2020
  3. Jerry Doyle said:

    Similar with Fred Stein, I do not believe the vast majority of consumers care if Apple comes forth with a 5G phone this fall. The industry cares, though. The analysts care. The media cares.

    If Apple fails to come forth with a 5G phone, then it gives common fodder to the media, to analysts and industry followers to exploit proclamations that Apple has lost its mojo, its ability to be competitive and to innovate. Now, we all know that ain’t so, but Apple’s failure to deliver a 5G phone this fall will play into the hands of many who will use that failure as a means to bludgeon Apple’s creativity talents.

    I suspect we will see Apple come forth with a 5G phone.

    2
    March 26, 2020
  4. Charles Keller said:

    How many of those direct deposits designed to help people pay for rent, will ultimately be spent on IPhone, AirPods, iPads and the like? We may be a huge benefactor of this disaster’s version of “Cash for Clunkers”.

    I just tried to buy a PS4 on Amazon for a young man’s birthday. It won’t get here for a month. Bored teenagers driving a huge demand. Wonder how much of that dynamic becomes a big plus for all AAPL believers?

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    March 26, 2020
  5. Paul Brindze said:

    “long term we are all going to die”

    Except me … I have no intention of dying. That’s why my life insurance investment is a horrible waste of money. I should sell the policy and put it all into AAPL.

    Meanwhile, without doing that, I did buy a few more shares today at about 252.45 (though also hedging with near term, out of the money, call sales … things rarely go up in a straight line).

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    March 26, 2020
  6. John Konopka said:

    As with any large project Apple likely has various cushions built in to accommodate unforeseen delays. It would be crazy to plan years ahead for a release on the premise that every step of the process will be on time.

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    March 26, 2020
  7. Kathy Corby said:

    Greg– I am buying deep ITM LEAPS farthest out expiration. DITM to minimize extrinsic value, which is affected by current volatility. Selling monthly .3 delta short calls against them. With volatility this high, they could well be paid for by the time June 22 runs around. Will dollar cost average as stock price continues to fall, which I believe it will, but should recover pretty well within 2+ years. GLTA. (For non-traders, “good luck to all”.) And BTW, don’t buy shares outright. If you want ’em, sell a weekly ITM put or put spread. Get paid to take ’em. Lots, now, with vol this high.

    0
    March 28, 2020

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