Apple could change its iPhone release schedule to twice a year, JP Morgan says

Apple could change its iPhone release schedule to twice a year, JP Morgan says
By: WNG CNBC Posted On: December 02, 2019 View: 40

Apple could change its iPhone release schedule to twice a year, JP Morgan says

An employee, left, shows a customer the features of an iPhone 11 at Apple store during a product launch event in Kuala Lumpur, Malaysia on Friday, September 27, 2019.

Chris Jung | NurPhoto | Getty Images

Apple could change its iPhone release strategy to launch new devices twice a year starting in 2021, J.P. Morgan analysts predicted in a note distributed on Monday, citing supply chain checks.

The shift in strategy would allow Apple to smooth its traditional seasonality and will give the company increased flexibility to change its products within a six-month time frame and compete with other device makers which launch new phones throughout the year.

Since 2011, Apple has released major new iPhones in September and October, setting up the quarter that ends in December to be Apple's largest, boosted by the holidays and new models. If Apple were to launch new iPhones twice a year, as the J.P. Morgan analysts suggest, it would be a major strategy shift for Apple's most important product line.

"Based on our supply chain checks, we are expecting a strategic change in the launch cadence with the release of two new iPhone models in 1H21 followed by another two in 2H21, which will serve to smooth seasonality around the launch," J.P. Morgan analyst Samik Chatterjee wrote.

The analysts also published predictions for Apple's 2020 iPhone lineup in Monday's note, predicting that four new iPhone models will launch in September 2020. That's a change from from the three model strategy Apple has used since 2017. They also believe that Apple will release a low-cost iPhone resembling the iPhone 8 in the spring.

The J.P. Morgan analysts predict all four devices launching next fall will sport superior OLED screens and support 5G networks, although some models will not support mmWave technology that promises faster speeds.

"The 2H20 lineup will include all OLED phones, with screen sizes of 5.4" (one model), 6.1" (two), and 6.7" (one), broadening the screen size range from 5.8" to 6.5" in 2019," Chatterjee wrote. "We expect the two higher end models (one 6.1", one 6.7") to include mmWave support, triple camera and World facing 3D sensing, while the lower-end models (one 6.1", one 5.4") will include support for only sub-6 GHz and dual camera (no World-facing 3D sensing)."

The analysts note that the increased screen size options and 5G support could encourage current iPhone users to upgrade.

The J.P. Morgan predictions have slight differences to other early reports about next year's iPhones. Last month, Korean news site ETNews also discussed the same screen sizes, but did not mention two different models with 6.1-inch screens and said that "a model will support 5G."

Leading Apple analyst Ming-Chi Kuo from TF Securities has predicted that all of Apple's 2020 iPhones will support 5G networks. He too believes Apple is planning iPhones with 6.7-inch, 6.1-inch, and 5.4-inch OLED displays.

J.P. Morgan is overweight on Apple and raised its 12-month price target to $296 from $290.

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