We are now at the halfway point between last year’s iPhone event and the announcement of the 2019 iPhones, which is expected in mid-September. And we’re already beginning to see details emerge about the 2020 iPhones … Apple (NASDAQ:AAPL) may be focused on services like Apple TV+ at the moment, but the reality is that AAPL revenue and Apple stock remain tied to the iPhone.
And a series of leaks from the supply chain suggest the company is pulling out all the stops in an effort to reverse the current slide in iPhone sales, including big moves in 2019 and next year.
Triple Camera Coming to This Year’s Big iPhone
Apple helped to popularize the multi-camera setup that has become a standard in current smartphones — with the exception of Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google Pixels series. But the two-camera system AAPL introduced with the iPhone 7 Plus is now falling behind the competition. Samsung’s new Galaxy S10 features a triple camera and Huawei’s P30 Pro has four cameras.
Apple is reportedly working on a triple camera system for the 2019 version of the iPhone Max. That is expected to deliver 3X optical zoom, and could also offer enhanced 3D sensing for augmented reality applications and better low light performance.
2019 iPhones Also Expected to Feature Two-Way Wireless Charging
Apple killed the AirPower wireless charging mat that was announced at the 2018 iPhone launch. However, the company still has wireless charging ambitions.
The 2019 iPhones will reportedly feature two-way wireless charging. This means the iPhone itself could charge AAPL’s latest AirPods wireless earbuds simply by setting the AirPods case on the iPhone’s back. To make two-way wireless charging more practical, Apple is expected to also boost the battery capacity for the 2019 iPhones.
Sounds good, but this feature was also a part of the latest Galaxy S10.
Report: Three Sizes of iPhones Next Year, All OLED
The latest big iPhone rumor skips 2019 to focus on the 2020 iPhones. According to a report this morning in Taiwan’s Digitimes (via 9to5 Mac) Apple is planning to move to all-OLED iPhones next year. That has previously been reported by The Wall Street Journal.
However, Digitimes has a new wrinkle that suggests the company could be up-sizing. Rumblings from Apple’s supply chain point to 5.42-inch, 6.06-inch and 6.67-inch panels. That would give the 2020 Max model the largest-ever display in an iPhone, and assuming the middle size is the iPhone XR successor, it would mean the iPhone XS equivalent shrinks from the current 5.8-inch display. A smaller iPhone would help with customers who don’t want a smartphone so large it requires two hands to operate — a segment AAPL largely abandoned when it discontinued the iPhone SE.
Going all-in on OLED would give Apple premium quality displays across its entire lineup, and help to reduce the bezels on the iPhone XR. But those OLED displays are the single most expensive component in an iPhone, and that’s going to put price (or profit margin) pressures on Apple.
Is Playing Catch Up Good Enough?
Apple helped to kick off the smartphone era with the iPhone in 2007. A decade of record-setting iPhone launches drove Apple stock to stratospheric levels while setting the design trends that other smartphone manufacturers followed. Now AAPL finds itself in the position of playing catch up.
The 2019 iPhones may be the best yet, but Apple isn’t expected to offer capabilities the competition will be heavily promoting, including 5G support and the option of a folding smartphone. Key upgrades this year — including a triple camera system and pass-through wireless charging — will be seen as trying to keep pace with the competition.
That will make it tougher for AAPL to continue its strategy of boosting iPhone prices to keep revenue growing when unit sales are slipping.
The question is, will Apple’s moves in 2019 and 2020 be enough to stabilize and even grow iPhone revenue over the next few years while the company continues to expand its services? If so, that’s good news for AAPL investors. If not, the continued reliance on iPhone revenue could spell bad news for Apple stock.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
