Morgan Stanley Analyst Believes Apple will Create a Mid-Year iPhone Event Cycle that could Smooth Out Seasonality
Morgan Stanley has pro Apple analysts on staff including Katy Hurberty and Samik Chatterjee who initiated coverage of Apple a little over a year ago. It's being reported today that Chatterjee is making a bold prediction about Apple business model and one that any Apple fan or investor might appreciate.
With Apple's competition introducing smartphones at various times of the year, and more importantly, multiple times a year has put pressure on Apple business model that stuck on a single refresh cycle a year.
Looking ahead to Apple’s 2020 iPhone launch season, Chatterjee expects Apple to unveil four new devices spanning a wider range of screen sizes. His channel checks suggest that the company is planning a 5.4-inch model, two 6.1-inch devices, and one 6.7-inch phone, all of which will support 5G connectivity.
More importantly, Chatterjee predicts that by 2021 (or earlier) Apple is likely to change it's current launch model. He notes that although "the company’s fall iPhone launch events have become a mainstay, Chatterjee’s supply-chain checks indicate that Apple may begin staggering its iPhone introductions after this fall, and he now expects “a strategic change in the launch cadence with the release of two new iPhone models in 1H21 followed by another two in 2H21."
Such a shift could help Apple "smooth seasonality" around iPhone launches, Chatterjee wrote, while also helping the company better compete with rival phone introductions that happen throughout the year. In addition, a staggered launch may help limit Apple’s exposure to "product cycle missteps" by allowing the company to alter designs more quickly in response to market feedback.
MarketWatch referred to Chatterjee having "wrote" these predictions. If he wrote this to clients, then he'd have to believe strongly in his sources and not pass on invented personal opinion or a personal hope. Read more about this in the MarketWatch report
I'm not a fan of analyst projections as more times than not they're pushing a stock to get clients to buy more of. Yet shaking iPhone launches up, in whatever way Apple see's fit, could very likely smooth out seasonality for Apple and spark more interest in Apple products, services and accessories throughout the year.
In mid-October we posted a report titled "Rumor Claims Apple will Release an SE2-Like Smartphone in Q1 2020 starting at $399." The rumor was from Ming-Chi Kuo of TF Securities. Even if it was a little later like Q2, Chatterjee's supply-chain sources will have been right.
The new mid-tier smartphone war is where the action is for smartphones worldwide and if Apple is set to enter that race with the SE2-like entry, it should have a separate annual release cycle from their premium smartphones. That's what makes this prediction so interesting and logical.
Will it come to be? While only time will tell, analyst Kuo can't afford to get this one wrong if he wants to keep his reputation intact.