Supply-chain reports point to Apple gearing up for double-digit growth in iPhone sales next year, with signs suggesting that a high proportion of iPhone owners will upgrade for 5G.
One Apple analyst believes that Wall Street is underestimating the iPhone’s prospects for 2020 and beyond…
Wedbush bases its optimistic view on a mix of factors, starting with early supply-chain signals.
Looking ahead and coming off our recent Tech Asia trip, we believe the underlying iPhone demand remains comfortably ahead of Street/original expectations for FY20 with 185 million/190 million units now the line in the sand for Apple to hit with positively trending ASPs.
We believe iPhone 11 is just the front end of this current “supercycle” for Cupertino with a slate of 5G smartphones set to be unveiled in September that will open up the floodgates on iPhone upgrades across the board that the Street continues to underestimate. There are at least five iPhone versions that will launch in 2020 with the main event the 5G launch in September that could include a number of versions/models, although those final specs will not be finalized by Apple likely till the April timeframe with the supply chain (and investors) eagerly awaiting this flagship launch.
Importantly for initial 2020 builds, our supplier checks indicate a double digit increase for expectations for overall units (10%+ y/y) as the early views of 5G phones coming out next September appear to be very robust from suppliers.
There are roughly 900 million iPhone owners at present, and Wedbush believes that more than a third of them are likely to upgrade for 5G next year.
To this point, we believe 200 million units could be the starting point for 5G Apple smartphone demand as roughly 350 million iPhones within the 900 million installed base of Cupertino are currently in the window of an upgrade opportunity.
The analysts say that while they paint a rosier picture than the Wall Street consensus, Apple has already demonstrated an ability to exceed expectations.
A year ago Cupertino was facing major Herculean-like challenges around lagging China demand, tariff escalation on the horizon, increasing competition on smartphones, and trailing Samsung and others in the key 5G race.
Investors were throwing in the towel on the name with many on the Street thinking the Apple growth story was over and in the rearview mirror.
Defying the skeptics, Cook in his finest hour in our opinion led Apple to successfully battle through China growth struggles, settle its long standing lawsuit with Qualcomm (and acquire Intel’s Smartphone modem business to catalyze its 5G efforts), develop and bring to market its trifecta of iPhone 11s, which has been a major consumer success out of the gates, and most importantly play a game of poker with the tariff China black cloud that worked out in a Picasso-like fashion for Apple.
This follows an even more bullish suggestion that Apple expects 100M orders for the iPhone 12 next year, compared to around 80M for the iPhone 11.
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Britain in talks with 6 firms about building gigafactories for EV batteries
Britain is in talks with six companies about building gigafactories to produce batteries for electric vehicles (EV), the Financial Times reported on Wednesday, citing people briefed on the discussions.
Car makers Ford Motor Co and Nissan Motor Co Ltd, conglomerates LG Corp and Samsung, and start-ups Britishvolt and InoBat Auto are in talks with the British government or local authorities about locations for potential factories and financial support, the report added .
(Reporting by Kanishka Singh in Bengaluru; Editing by Himani Sarkar)
EBay to sell South Korean unit for about $3.6 billion to Shinsegae, Naver
EBay Korea is the country’s third-largest e-commerce firm with market share of about 12.8% in 2020, according to Euromonitor. It operates the platforms Gmarket, Auction and G9.
Shinsegae, Naver and eBay Korea declined to comment.
Lotte Shopping had also been in the running, the Korea Economic Daily and other newspapers said, citing unnamed investment banking sources.
South Korea represents the world’s fourth largest e-commerce market. Driven by the coronavirus pandemic, e-commerce has soared to account for 35.8% of the retail market in 2020 compared with 28.6% in 2019, according to Euromonitor data.
Shinsegae and Naver formed a retail and e-commerce partnership in March by taking stakes worth 250 billion won in each other’s affiliates.
($1 = 1,117.7000 won)
(Reporting by Joyce Lee; Editing by Edwina Gibbs)
Canada launches long-awaited auction of 5G spectrum
The 3,500 MHz is a spectrum companies need to provide 5G, which requires more bandwidth to expand internet capabilities.The auction, initially scheduled for June 2020, is expected to take several weeks with Canadian government selling off 1,504 licenses in 172 service areas.
Smaller operators are going into the auction complaining that recent regulatory rulings have further tilted the scales in the favour of the country’s three biggest telecoms companies – BCE, Telus and Rogers Communications Inc – which together control around 90% of the market as a share of revenue.
Canadian mobile and internet consumers, meanwhile, have complained for years that their bills are among the world’s steepest. Prime Minister Justin Trudeau’s Liberal government has threatened to take action if the providers did not cut bills by 25%.
The last auction of the 600 MHz spectrum raised C$3.5 billion ($2.87 billion) for the government.
The companies have defended themselves, saying the prices they charge are falling.
Some 23 bidders including regional players such as Cogeco and Quebec’s Videotron are participating in the process. Shaw Communications did not apply to participate due to a $16 billion takeover bid from Rogers. Lawmakers and analysts have warned that market concentration will intensify if that acquisition proceeds.
In May, after Canada‘s telecoms regulator issued a ruling largely in favour of the big three on pricing for smaller companies’ access to broadband networks, internet service provider TekSavvy Inc withdrew from the auction, citing the decision.
Some experts say the government has been trying to level the playing field with its decision to set aside a proportion of spectrum in certain areas for smaller companies.
Gregory Taylor, a spectrum expert and associate professor at the University of Calgary, said he was pleased the government was auctioning off smaller geographic areas of coverage.
In previous auctions where the license covered whole provinces, “small providers could not participate because they could not hope to cover the range that was required in the license,” Taylor said.
Smaller geographic areas mean they have a better chance of fulfilling the requirements for the license, such as providing service to 90% of the population within five years of the issuance date.
The auction has no scheduled end date, although the federal ministry in charge of the spectrum auction has said winners would be announced within five days of bidding completion.
($1 = 1.2181 Canadian dollars)
(Reporting by Moira Warburton in Vancouver; Editing by David Gregorio)
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