A new report says Apple will delay the launch of its flagship iPhones later this year, including its first 5G handset, though device research firm BayStreet Research doesn’t think it would have a major impact on U.S. carriers in Q4.
Apple is said to be pushing back its timeline by about a month, as the global coronavirus pandemic hampered consumer demand and interrupted manufacturing in Asia, according to the Wall Street Journal report, citing unnamed sources familiar with the matter.
While the iPhone maker is still moving forward with plans to introduce four new iPhone models this year, the sources said, mass production that usually sees the flagship devices ship in late September is being delayed until later this fall. Apple apparently intends to cut its planned iPhone production for the second half of the year by 20%.
In March, a similar report by Nikkei Asian Review warned that internal discussions were happening at Apple to push back its highly anticipated iPhone in the face of declined consumer demand, alongside practical supply chain challenges.
In an emailed response to Fierce, Cliff Maldonado, principal of BayStreet Research, which collects and analyzes smartphone sales data, said the firm doesn’t currently believe the iPhone launch has been delayed and pointed to a final decision potentially coming in May. Still, either way, BayStreet doesn’t see a delay of 30 days or less having a meaningful impact on U.S. carriers’ fourth-quarter results, according to Maldonado.
“If the 5G devices launch by the end of October, the carriers should not be overly impacted,” Maldonado said.
Apple would shift from growing year over year to likely declining, he continued, but indicated it wouldn’t be a major problem and “any lost demand for Apple will eventually come back.”
Numerous smartphone makers, including rival Samsung, have already introduced 5G handsets, but in the initial deployments of next-generation networks, device adoption has not exactly been swift.
At the end of January, for example, tracking by M Science showed that 5G device penetration in the U.S. was 2.49%. Counterpoint Research found that in 2019 5G penetration was just 1% of total smartphone sales.
In February, Samsung introduced its new Galaxy S20 lineup, which were the first 5G models capable of tapping both sub-6 GHz and millimeter wave spectrum bands. Still, those come with premium price tags starting at around $1,000 and carriers pushed promotions at a time when consumers still aren’t sold on the need for 5G.
A consumer survey by WaveForm released in April found that most consumers were still unclear on the benefits of 5G, partly due to the different varieties, including sub-6 GHz and millimeter wave. While 41.2% of respondents said they were “somewhat excited” about 5G service, almost another quarter said they were not so, or not at all excited about 5G service.
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Some, including some carriers, anticipated the launch of popular iPhone models with support for 5G, along with lower-cost models, to help fuel greater adoption of 5G service in 2020.
In late January for example, before the COVID-19 pandemic upended the economy and daily life for most across the U.S., AT&T executives expected a 5G device upgrade cycle in the second half of the year, coinciding with more widespread coverage rollouts and popular device availability like the 5G iPhone.
Now, with economic uncertainty and an unemployment rate that’s soared, it remains to be seen if consumers will still be willing to spend top dollar on premium smartphone devices.
BayStreet believes consumers will most likely hold off on buying a new handset rather than move to a lower device tier.
The base case thinking, Maldonado said, is “only a slight reduction in super premium device sales for Apple given the economic uncertainty. The US consumer will most likely delay purchase before trading down in smartphone price brands.”