The introduction of 5G-compatible iPhones in 2020 will keep alive a “supercycle” for Apple’s stock, Wedbush analyst Dan Ives told CNBC on Monday.
Ives, already Wall Street’s biggest Apple bull, raised his price target on the stock to $350, about 25% higher than where it closed Friday at $279. With share prices up 1.5% Monday, Apple have risen nearly 80% in 2019.
“We’re only halfway there through what I believe is a supercycle,” Ives said on “Squawk Box.”
Ives said he believes Apple next year will release at least four phones that can be enabled with 5G, a next-generation mobile network that promises faster data speeds, lower latency and other capabilities to support emerging technologies such as self-driving cars.
Coverage in the U.S. is not yet widespread, but expectations are high for it to grow in 2020.
Many analysts expect that a 5G iPhone will reignite slumping phone sales that resulted from users holding onto their older models longer. One report suggests the tech giant may ship more than 80 million units.
Indeed, current iPhone users seem interested in a 5G model, according to a recent Piper Jaffray survey. Of the 1,050 current iPhone owners who responded, 23% said they would upgrade to a $1,200 5G iPhone, up from 18% of participants a few months earlier.
Ives’ belief that 5G iPhones will drive Apple’s stock higher next year is not universally shared.
Loup Ventures managing partner Gene Munster, for example, told CNBC earlier this month that investors should temper their expectations around 5G iPhones. He said the first year of those iPhones will be a “disappointment for investors.”
“Ultimately, this is a massive opportunity for Apple, huge play on 5G, but it’s going to take a while for networks to roll out coverage,” Munster said.
When asked about how a potential lack of 5G availability may hurt sales, Ives said he believes there would be “two parts to the upgrade.” The first will occur next year, he said, with the second arriving in 2021.
“Right now, about a third of the install base, they have not upgraded their phones in 39 months,” he said. “So we’re going into what’s going to be a supercycle. I think you could have a mix of 4G, 5G. But that’s right now what I love about this set up of Apple.”
Apple purchased Intel’s 5G modem business over the summer, leading some to believe that we’d see Apple’s own branded modem hardware in the 2020 iPhones.
Apple’s first 5G-capable iPhones, reportedly due out in the latter half of 2020, will come equipped with Qualcomm’s X55 5G modem, sources familiar with the matter tell the Nikkei Asian Review (paywalled, via The Verge).
Qualcomm unveiled its second-gen Snapdragon X55 5G modem, which it claims is 40 percent faster than its predecessor, back in February just ahead of the annual Mobile World Congress convention in Barcelona. The announcement came while Apple and Qualcomm were still at odds but in the months to follow, the two decided to set their differences aside and drop all patent litigation worldwide.