Why 5G is high octane fuel for Apple’s stock price

5G is high octane fuel for Apple’s stock price, according to Wedbush analyst Daniel Ives who says that 5G, combined with the services and wearables businesses, could push Apple’s $1.3 trillion market cap toward $2 trillion within a few years.

Apple’s next-generation flagship iPhones will carry the most advanced 5G modem chip, known as X55, from Qualcomm, four people familiar with the plan told Nikkei Asian Review last October.

Tim Mullaney for CNBC:

5G fuel for Apple's stock priceFor all of the talk about Apple Watches and Apple TV+, the quiet star of the hype around Apple’s first-quarter earnings was a product that isn’t even on sale yet… Arguably the biggest driver of Apple’s 40% stock gain since Sept. 30 is the growing hype for its upcoming 5G phone line, which is expected to launch this fall.

“5G is one of those undeniable transformative trends,” Daniel Ives, Wedbush Securities’ managing director of equity research, said in an interview Wednesday, days after raising his Apple price target to $400 on a combination of 5G expectations and gains in Apple’s services business. “The first and biggest beneficiary will be Apple. With a 95% retention rate (when customers upgrade phones), it’s like hitting the Lotto.”

Consumers have held on to their iPhones for longer and longer recently — a trend Ives and others think 5G may help Apple reverse. Three years ago the average iPhone was used for 26 months to 28 months before replacement, Ives said, and now that is up to 37 months to 38 months. “5G will shorten or stablize replacement cycles,” CFRA Research analyst Angelo Zino said Wednesday.

MacDailyNews Take: Yup.

The “iPhone 5G” will be right on time (actually ahead of time in most countries) and usher in a super cycle like we haven’t seen since Apple finally began offering iPhones with displays larger than 4-inches with iPhone 6 and iPhone 6 Plus in 2014.MacDailyNews, October 30, 2019

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

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