Is Apple Delaying Launch of the 5G iPhones?

Looks like production issues may cause the company to fall further behind its rivals Samsung and Huawei in this aspect

 

Ever since Apple shut down its plants in coronavirus-hit China two months ago, there were doubts over its ability to launch the much-anticipated iPhone 12, its first phone that is compatible with 5G networks that is slowly spreading across the world. Now, it appears as though the 5G iPhone would definitely not arrive this Fall.

And by the look of things, supply side constraints have nothing to do with this decision. A report published by Nikkei Asian Review says the Cupertino-based tech giant isn’t convinced that the current lock-downs and economic slump is the right moment to launch a pricey smartphone in the market.

Quoting unnamed sources, the article says supply chain constraints aside, Apple is worried that the current situation would lower consumer appetite to upgrade their phones, which could result in “a tame reception for the first 5G iPhone, and they need the first of these to become a hit.”

Prior to the outbreak of the pandemic, analysts had held the view that the release of the 5G iPhone scheduled this September would drive a healthy upgrade cycle for the brand, given the speculation that the new launch would make cloud-based gaming a big market mover for Apple, which had also prepared itself with its own gaming bouquet under Arcade.

Apple, which boasted iPhone sales worth close to $56 billion in Q1, had acknowledged later that the spread of the coronavirus was taking a toll on consumer demand and supply chain, thus confessing to shareholders that its revenue expectations for the current would not meet previous expectations.

With both Samsung and Huawei launching 5G models at the start of the year, Apple faces the precarious situation where they may not be able to provide an option to customers seeking to upgrade. It may be recalled that the company had set an aggressive target for its mobile suppliers to make 100 million units for 2020 with four different models being designed.

So, where does the current situation leave Apple? The company is said to be monitoring the developments in Europe and the United States, its largest markets accounting for more than half the sales. The probability of a launch this year depends on how the company perceives the situation by end of May.

The article in Nikkei Asian Review further suggests that the travel curbs in the US and China had impacted the engineering development of the new iPhone. To create a more concrete prototype from early March, the engineers had to collaborate closely with hands-on testing till end-March which couldn’t be achieved due to the pandemic.

It concluded that suppliers haven’t yet been notified of a possible change in production timelines. In fact, Apple was reportedly urging many of them, including those who are coming back to work in China, to make up for the time lost due to the coronavirus disruptions.

Of course, another way of looking at it is that even the deployment of 5G networks would get delayed, given that most of the US and Europe is under lockdown. So, even if Apple were to rush through the 5G iPhone, users may have little or no use for it.


TAGS: Apple, Apple iPhone, iPhone12, 5G, Samsung, Huawei, coronovirus, COVID-19, nikkei