What you need to know
- The iPhone upgrade "supercycle" is expected to continue through 2022, according to Wedbush.
- Analysts Daniel Ives and Strecker Backe are not seeing the usual dip in production for the iPhone 12 lineup.
The iPhone upgrade "supercycle" of the iPhone 12 may continue straight into the iPhone 13 lineup, according to new analysis from investment firm Wedbush.
In an investor note seen by AppleInsider, analysts Daniel Ives and Strecker Backe say that the usual dip in production after the initial launch of a new iPhone lineup is smaller than usual this year.
Following the Chinese New Year, supply chain checks indicate that Apple is remaining bullish on its production, write analysts Daniel Ives and Strecker Backe. Rather than any major changes to expected reductions in production, there are only a few "tweaks to near-term builds."
According to the analysts, they have not seen iPhone performance like the iPhone 12 lineup since 2014, when Apple launched the redesigned iPhone 6. It's kind of fitting, as the iPhone 6 took the iPhone from squared-off edges to curved edges, and now the iPhone 12 takes it back.
"We have not seen a robust launch trend such as this in a number of years for Apple," the analysts offer. "The only iPhone trajectory similar would be the iPhone 6 in 2014 based on our analysis." Though Wall Street is anticipating roughly 220 million iPhone units to be produced throughout 2021, Wedbush still believes Apple could do more. Based on the current trajectory and a bull case, Apple still has the potential to sell "north of 240 million units," or even an "eye-popping" 250 million.
The analysts also predict that Apple will initially build approximately 100 million units for the iPhone 13 lineup, a 25% increase from the 80 million that was initially built for the iPhone 12. It is believed that 5G adoption, as well as a potentially post-COVID market, could continue to drive upgrades.
"We believe this speaks to an increased confidence with Cook & Co. that this 5G driven product cycle will extend well into 2022," the note states. It also mentions how Apple could benefit from a "post-vaccine consumer reopening environment," with customers able to shop and spend more freely as efforts to immunize populations from COVID-19 continue.
Wedbush's estimates on the expected continued performance of the iPhone 12 line up with earlier analysis from JP Morgan, which believes that the iPhone 12 lineup will outperform last year's iPhone by at least 13%.
Bottom line: The iPhone 12 Pro is easily one of the best phones of 2020, but it may not be enough of an improvement over the iPhone 12 to justify its additional $170 price tag.
