Apple Inc. (NASDAQ: AAPL) is expecting to sell a similar number of 5G iPhones this year as it sold the latest versions of the smartphone in the previous few years, inspite of the global supply chain and consumer demand being ruffled by the COVID-19 pandemic.
What Happened: The technology giant is ramping up production and has reached out to suppliers asking them to produce over 75 million iPhones to match up with global demand, according to a Bloomberg report on Tuesday.
Apple is expected to launch four new models of its next-generation iPhones sometime in Oct 2020. The Bloomberg report also hinted towards a refreshed product lineup in the fall, which includes the new iPad Air, two new versions of Apple watches, a first of its kind over-ear headphones, and a HomePod speaker.
Why It Matters: In 2019, Apple suppliers had a target of 75 million iPhone components, similar to the 2018 targets. Almost half of Apple’s revenues are generated from iPhones, and based on the production plans the company expects the trend to continue. A week ago, a Morgan Stanley analyst put a price target of $520 whereas Wedbush analyst pinned it at $515 with an "Outperform" rating.
The adoption of millimeter wave technology and 5G technology reportedly increased the cost for manufacturing fifth-generation iPhones $200 higher, which the Cupertino-based plans to offset the increased cost by changing its battery design, according to analyst Ming-Chi Kuo.
Price Action: Apple shares traded 2.06% higher at $131.70 in the pre-market session Tuesday.