As is now common knowledge, a couple of days ago Apple launched what was deemed “the most significant iPhone event since the iPhone 6,” according to Morgan Stanley. Other analysts have hopped on that bandwagon as well and they are all trumpeting that this phone will create another “super-cycle.”
The “super-cycle” was coined from a unique sales cycle of the Apple iPhone 6, released in 2014. In the following four quarters, there were more than 220 million sold. Analysts and Wall Street are looking back to that in anticipation of the release of the 5G iPhone 12. They predict Apple will sell a similar quantity of the 5G iPhone 12 as they did back in 2014. Hence, have another super-cycle.
However, much of what Wall Street, and the analysts, are predicting is with their fingers crossed.
Most analysts and certainly Wall Street get their prognostications from history and what they are told by the industry. When it comes to Black Friday, they can be pretty successful at crystal-balling. This, even with major disruptions such as the current pandemic.
However, when it comes to technology, they have less of a track record. This is, basically, due to a couple of primary reasons. The first being that most of them do not understand tech – the business end of tech, yes, but not tech itself. Therefore, they have to rely on what the industry tells them.
The second reason is the tech industry is notorious for spewing hype. Just look at 5G if you need a model.
And not all analysts are on board with another super-cycle. Just for the record, neither am I. I do not, generally, get my data from the heads of the telecom players, analysts (other than those I know well), or Wall Street watchers. I get most of it from the typical user (and my GF). If the professional pollsters can call a trend with a few hundred to a few thousand surveys, I figure I can do the same with a few dozen.
So, I do not think a super-cycle is going to happen. Here is why.
The pandemic, of course. There is not much to say about it that has not already been said. The metrics around smartphones are no different than most other consumer items.
In normal times one of the variables that can create such an event is device age. Analysts estimate that at least 30 percent of iPhone users have a device three years old or older. That is an unusual metric in a segment with a typical one-year upgrade cycle. Therefore, in normal times that may have been a good metric to create a super-cycle. However, in these times, people are holding on to their money and unsure of the immediate future. That is a substantial change due to the pandemic and has a significant effect on consumer spending.
As well, there has not been a real impetus to upgrade. The slope of technology in phones, other than gee-whiz cameras, has flattened with few real improvements over the past few years.
For the model 12, it is not a real departure from the last couple of year’s models. In fact, other than 5G, it seems be a lot like the model X (10).
Now, on to the real issue, 5G. First of all, I got a good laugh out of Verizon comment at the Apple release party, “5G just got real.” Really? Does Verizon really think that Apple is, single-handedly, going to change the 5G landscape? Well, OK, then! Like everything on the internet, if it says it, it must be true.
I have often penned that 5G has been more hype than reality. In spite of the “rah-rah” coming from Verizon at the event, 5G has been slow to deploy here. And what deployments are happening are limited in coverage and far from the improvements promised in the hype.
The most avant-garde network is T-Mobile’s low- and mid-band. Their claim to fame is coverage, particularly in low-band. But their 5G in these bands trades off performance for coverage. While performance is often better, it is not better everywhere. Generally, your results may vary.
That will improve with time. For now, if users think they are going to see significant speed improvements they will be disappointed.
Mid-band fares a bit better in the performance vectors. But there are other challenges exist such as contiguous spectrum.
And of course, there is the perception of 5G. The latest figures show that around half of all the mobile users believe they already have 5G (nearly all of my informal poll subjects, do). If that is really the case, the logical assumption is that 5G is no better than 4G, since nothing has changed for them.
And to be fully transparent, 5G is so fledgling that it will be, at least, another year or two before there is a decent 5G infrastructure at 6 GHz and below. And remember, the real magic of 5G happens at mmWave, where there is a bounty of contiguous spectrum. However, because of mmWave’s propagation issues, the 5G densification required at mmWave frequencies to have a ubiquitous network, will take much longer.
The carriers need to figure this one out, and fast, same for the hardware vendors. 5G is such a convoluted topic in most consumer minds that it creates more confusion, than interest, at present.
As far as the Apple event feeding a super-cycle, as I said, my gut feeling is no. However, it appears that Apple, as well as the carriers, may sense the consumers’ reticence. There is a huge push by all of them to parlay the model 12 with all kinds of deals and spiffs. That tells me that they might be fighting an uphill battle with the circling pandemic and poor 5G reception thus far and the need to feed the consumer machine. Will it be successful? We should know shortly.
In the end, I might be wrong. I have been in the past. It would be nice if I were since the industry could use a shot in the arm.
If I am right, then, obviously, it is simply a matter of riding all this out and eventually, 5G will catch on and the phone manufacturers will see better times.