Apple Expects iPhone Shipments to Return to Growth in 2020

Debby Wu and Nate Lanxon
Bloomberg News

Apple Inc. expects iPhone sales to return to growth next year as the introduction of a line of 5G devices supercharges demand, a person familiar with the company’s production plans said.

Apple aims to ship more than 200 million handsets in 2020 after introducing more than four new iPhone models, possibly including 4G and 5G models and a low-cost successor to the budget iPhone SE device, the person said. That’s up from analysts’ estimates of about 170 million to 190 million for 2019, snapping at least a year of stagnant sales.

The lineup however isn’t finalized and Apple’s plans may change, the person said, asking not to be identified discussing confidential plans.

In this Sept. 10, 2019, photo, Phil Schiller, Senior Vice President of Worldwide Marketing, talks about the new iPhone 11 Pro and Max, during an event to announce new products in Cupertino, Calif.

Smartphone makers from Samsung Electronics Co. to Huawei Technologies Co. have already put 5G-capable devices on the market, betting that the emergence of the newest generation of wireless technology will drive innovation from automated factories to smart homes, exciting consumers and underpinning their businesses in coming years.

Apple however opted to bring the technology to the iPhone next fall, more than a year behind its major rivals, in part to ensure global networks can support a true 5G user experience. On Wednesday, the Nikkei reported that the company is telling suppliers that it expects to ship at least 80 million iPhones with 5G wireless modems next year.

The iPhone remains Apple’s most visible and profitable product and new devices will also drive adoption of Apple’s services and applications.

Yet it’s struggling with soft smartphone demand as people take longer to replace their gadgets and rivals grab market share. The trade war is also denting economic growth in China, Apple’s largest market outside of the U.S., while souring consumers there on American brands.

An Apple spokeswoman didn’t have an immediate comment. The company’s shares are hovering near an all-time high, as optimism mounts over the iPhone 11’s reception.

Apple reports earnings after the end of trading in New York Wednesday. Analysts expect the Cupertino, California-based company to forecast iPhone revenue of $49.7 billion in the fiscal first quarter, down more than 3% year-over-year. That would be the second iPhone revenue drop in a row for the holiday period.

Jeff Pu, an analyst at GF Securities, said a broader lineup of handsets will help iPhone shipments grow in 2020.

“The new entry level iPhone SE2 will help iPhone shipments see double-digit year-to-year growth in the first half,” he said. “The combination of a lower-cost 4G phone and premium 5G handsets in the second half will help Apple appeal to both cost-sensitive users and high-spending customers.”