What does Apple’s 5G phone mean for its stock price

What does Apple's 5G phone mean for its stock price-spark global limited

Apple said at the press conference that all iPhone 12 series models support 5G communication. The latest iPhone 12 will no longer provide wired headsets and chargers, charging will use an upgraded wireless charging system MagSafe system. In terms of price, the iPhone 12 Mini starts at $699, the iPhone 12 starts at $799, and the iPhone 12 Pro starts at $999.

Except for new products that have greatly changed their functionality compared to the past, analysts are mostly optimistic about Apple’s future stock price. They gave a high target price of $150 and a low target price of $47.50. At present, the stock has 4 sell ratings, 15 hold ratings and 27 buy ratings, eventually forming a consensus rating of “buy”.

With the high penetration rate of the emerging smartphone market and the repeat purchase rate of existing customers, Apple still has a large market in the iPhone mobile phone market. Analysts believe that in the iOS operating system and mobile phone market, customer loyalty and participation Degree and safety degree can bring returns to Apple in the long term.

The main reasons why analysts remain optimistic about Apple’s future stock price are:

Apple’s hand opportunity ” super cycle”

The market generally expects that this rotation season cycle will be a “super cycle”. The main “super cycle” of the last iPhone upgrade occurred in 2014, when Apple launched the iPhone 6, and subsequent Apple mobile phone products have not been huge in design. Changes, and the new addition of 5G functions to mobile phones this time will not help consumers make the decision to switch phones. In addition, during the epidemic, the utilization rate of smart devices including mobile phones has increased, and electronic products have a significant impact on work and life during the isolation period. Therefore, the release of this new machine is very important for the entire industry.

Not only that, iPhone12 sales are expected to reach more than 75 million units, with a target of 80 million units. Importantly, 350 million of the 950 million iPhones in the world are currently in the upgrade stage, which will bring an unprecedented upgrade cycle for Cook.

Diversification of future income

At the beginning of 2017, Apple CEO Tim Cook stated that he hoped that the company’s service revenue would double by 2020, which became a reality. In the quarter ended June, the company’s service revenue hit a record of $13.2 billion. Apple has an installed user base of more than 1.5 billion. If it allows these customers to increase their use of services such as Apple Music and App Store, rather than just the use of physical electronic goods, it will further promote growth to a large extent.

The company has also expanded service growth in wearable devices, home equipment and accessories, including AirPods, Apple Watch and Beats. Today, a HomePod Mini with a price of 99 yuan was also released, which directly challenged Amazon Echo, which is also regarded as one of Apple’s ambitions to create diversified income.

These two areas have a much greater impact on income. In 2016, service and accessories revenue accounted for only 16% of Apple’s total revenue. In the first nine months of fiscal year 2020, they generated $62 billion in revenue, accounting for 30% of total revenue. Even with this growth, the iPhone still accounts for more than half of the company’s revenue.

The wolf is coming? The first to pave the way in the 5G era

Regardless of whether the operator is ready, consumers have very high expectations for the speed increase of their expensive new phones, but the transition to 5G may catch operators by surprise. Over the years, despite the fact that the 5G storm has been great, companies have rarely made substantial actions. U.S. operators have spent billions of dollars to upgrade their networks. If 5G is connected, the speed of mobile phones is expected to be 10 times faster than current connections, but the fact is, at least for now, not so.

Today, Verizon( 60.64 , 0.41 , 0.68% )

T-Mobile, the second-largest operator, launched its national network in December last year, and the current low-band 5G network has covered 250 million people. AT&T’s low-band 5G service reached the national standard this summer, covering 205 million users.