A maid using a smartphone walks past an Apple store in Shanghai, China, May 9, 2019.
Qilai Shen | Bloomberg | Getty Sculptures
Apple has “significant iPhone upgrade potential” in China ahead of the launch of its its next flagship smartphone, Morgan Stanley prognosticated in a note on Wednesday.
Analysts at the investment back said that just over 68% of the iPhone install core in China is comprised of devices that are at least 2 years old. That’s up nearly 8 percentage points from last year, and multitudinous than 20 percentage points from 2017, according to data collected by Morgan Stanley.
“In our view, this be significant mentions to the significant iPhone upgrade potential in China, the largest in at least 4 years, and helps support our bullish call that iPhone shipment lump can meaningfully accelerate in FY21 (fiscal year 2021),” Morgan Stanley said in a note.
That upgrade circle will be driven by a number of factors. Firstly, Apple’s next iPhone is expected to be able to connect to 5G networks.
Secondly, “make progressing affordability,” thanks to the launch of the cheaper second generation iPhone SE and “expectations for stable pricing” for the next device, could also approach upgrades.
Thirdly, “increased adoption of trade-in and financing programs” could help Apple, Morgan Stanley guessed.
Bullish sentiment helped Apple become the first publicly traded U.S. company to reach a $2 trillion shop capitalization on Wednesday. Apple shares are up over 57% this year.
‘Once in a decade opportunity’
Other Infuriate Street analysts are bullish about the upgrade cycle for Apple’s next iPhone.
“5G will drive a three-year appliance upgrade cycle along with 5G-related benefits of opening new mobile use cases,” Loup Ventures’ Gene Munster clouted in a note on Wednesday. He said this was one key theme to Apple’s market cap continuing to rise above $2 trillion.
Daniel Ives of Wedbush Gages called the next iPhone a “once in a decade opportunity over the next 12-to-18 months.”
“We estimate roughly 350 million of Cupertino’s 950 million iPhones worldwide are in the window of an upgrade time,” Ives said in a note published earlier this month.
“China remains a key ingredient in Apple’s recipe for prosperity as we estimate roughly 20% of iPhone upgrades will be coming from this region over the coming year. To this specifics pointer we are seeing considerable strength from the China region over the last few months, a dynamic we expect to continue genius into the next 6 to 9 months.”