Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Apple Might Launch 4 -- Not 3 -- New iPhones in 2020

By Evan Niu, CFA - Dec 3, 2019 at 9:20AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Mac maker might also switch up its launch strategy in 2021.

Expectations are already high for Apple's ( AAPL 3.55% ) 2020 iPhone lineup, with the Mac maker widely expected to add 5G support to its handsets after securing 5G modem supply from Qualcomm pursuant to the companies' settlement earlier this year. Apple has been releasing three new iPhone models per year since 2017, when it launched the iPhone 8, 8 Plus, and X.

The tech company had been expected to keep up, but one Wall Street watcher thinks Apple might have one more thing.

iPhone 11 Pro lineup

iPhone 11 Pro. Image source: Apple.

Two high-end iPhones plus two more affordable iPhones

In a research note to investors this week, J.P. Morgan analysts led by Samik Chatterjee predict that Apple will launch four new iPhones next fall, all of which will support 5G connectivity and feature OLED displays. The analysts expect a 5.4-inch model, two 6.1-inch models, and a 6.7-inch model. Compare that to the current lineup that includes a 6.1-inch model (iPhone 11), a 5.8-inch model (11 Pro), and 6.5-inch model (11 Pro Max).

Two flagship iPhones at larger sizes (6.1-inch and 6.7-inch) are expected to include mmWave support, while the two more affordable versions in smaller sizes (5.4-inch and 6.1-inch) may only support sub-6 GHz frequencies. 5G technology relies on both mmWave and sub-6 GHz frequencies, with mmWave enabling incredibly fast speeds over very short distances (ideal for dense urban areas) while sub-6 GHz will deliver greater coverage range.

The higher-end variants are also expected to include rear-facing 3D-sensing, which will dramatically boost the iPhones' augmented reality (AR) capabilities. Those 3D sensors are expected to use the time-of-flight (TOF) method, versus the structured light method that Apple currently uses in its TrueDepth camera for Face ID.

Smoothing out seasonality

Additionally, Chatterjee predicts that Apple will start launching new iPhones twice a year starting in 2021. "Based on our supply chain checks, we are expecting a strategic change in the launch cadence with the release of two new iPhone models in 1H21 followed by another two in 2H21, which will serve to smooth seasonality around the launch," the analyst wrote.

While Apple has released iPhones in the spring before, those models have largely been spec refreshes using existing designs, like the iPhone SE that was launched in March 2016. There is reportedly an iPhone SE 2 that resembles the iPhone 8 in the pipeline for spring 2020.

The iPhone segment has always experienced seasonality since Apple has historically released new models ahead of the holiday shopping season:

Chart showing iPhone revenue fluctuating

Data source: SEC filings. Chart by author. Calendar quarters shown.

In contrast, the growing services business marches steadily higher, always enjoying sequential growth. That segment's growing importance to Apple's overall financials is already helping to smooth out seasonality, but spreading out new iPhone launches could help reduce seasonality even further.

J.P. Morgan reiterated its overweight rating on the stock while modestly boosting its price target from $290 to $296.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
$171.18 (3.55%) $5.86

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/07/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.