Kuo: 2019 iPhones and New iPad Pro Models in Late 2019 to Early 2020 to Adopt New Antenna Technology

Apple plans to use modified-PI (MPI) material for most antennas in 2019 iPhones, rather than the liquid crystal polymer (LCP) material used for the iPhone XS, iPhone XS Max, and iPhone XR antennas, according to the latest research note from reputable analyst Ming-Chi Kuo, obtained by MacRumors.


Kuo believes that LCP limits the RF performance of the iPhone XS, iPhone XS Max, and iPhone XR antennas due to current technology limitations and production issues. This puts the RF performance of MPI material at least on par with LCP, despite MPI being easier and cheaper to produce.

While switching to MPI material for 2019 iPhone antennas appears to be a no-brainer decision for Apple, Kuo expects that LCP will still be the primary material for 5G antennas in 2020 iPhones, as he believes that the production issues limiting the RF performance of LCP will be resolved by then.

In today's note, Kuo also said he expects Apple to use LCP material in future iPad models, starting from the late fourth quarter of 2019.


In a separate research note last month, which has only been seen by Taiwanese media so far, Kuo said two new iPad Pro models with the same 11-inch and 12.9-inch screen sizes as the current models will enter mass production between the fourth quarter of 2019 and the first quarter of 2020.

Kuo said those new iPad Pro models will feature flexible circuit boards using LCP, but we've yet to receive that research note in English, so we cannot confirm any further details at this time.

Related Roundups: iPad Pro, 2019 iPhones

This article, "Kuo: 2019 iPhones and New iPad Pro Models in Late 2019 to Early 2020 to Adopt New Antenna Technology" first appeared on MacRumors.com

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Kuo: Two New AirPods Models Likely in Late 2019 to Early 2020, Including One With ‘All-New Design’

Apple will likely launch two new AirPods models as early as the fourth quarter of 2019, according to analyst Ming-Chi Kuo.


In his latest research note, obtained by MacRumors, Kuo forecasts that two new AirPods models will likely go into mass production between the fourth quarter of 2019 and the first quarter of 2020, with Luxshare, Goertek, and Amkor expected to be Apple's primary suppliers of the new earphones.

Kuo believes one of the new AirPods models will feature an "all-new form factor design" and a "higher price" than the second-generation AirPods, which cost $159 with a standard charging case and $199 with a wireless charging case. The other model is expected to be a more iterative update with the same pricing.

Both new AirPods models are said to adopt a new system-in-package design internally, which can improve assembly yield rates, save space internally, and reduce costs, but Kuo does not elaborate on outward-facing design changes.

The lead excerpt from Kuo's research note:
We expect Apple will likely launch two new AirPods models in 4Q19 at the earliest. One is the all-new form factor design at a higher price. The other's outlook and price will be the same as the current model's. A common internal design factor of these two new AirPods will be to abandon the current "SMT+RFPCB" design and change to adopt the SiP design instead for improving assembly yield rates, saving internal space and reducing cost.
Kuo is "positive on the demand for AirPods" and Apple's wireless headphones market share, as he believes the "all-new design" of one of the new models "could boost the replacement demand and attract new users." He estimates AirPods shipments will reach 52 million units in 2019 and 75-85 million units in 2020.

Last month, Apple launched second-generation AirPods powered by an Apple-designed H1 chip, enabling hands-free "Hey Siri" functionality and up to 50 percent more talk time compared to the original AirPods. The second-generation AirPods feature the same outward design as the original.

Bloomberg's Mark Gurman was first to reveal Apple's roadmap for AirPods, including the second-generation pair with "Hey Siri" support, while DigiTimes also expects third-generation AirPods to launch by the end of the year.

Related Roundup: AirPods 2
Buyer's Guide: AirPods (Buy Now)

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Kuo: 2020 iPhones to Support 5G, Qualcomm and Samsung Likely to Supply Modems

2020 iPhones will support 5G networks, with chipmaker Qualcomm likely to supply Apple with 5G modems for the devices after the two companies settled their high-profile legal battle last week, according to analyst Ming-Chi Kuo.


Interestingly, Kuo also expects Samsung to fulfill some of the 5G modem orders in select markets. Apple frequently aims to diversify its supply chain in an effort to reduce risk and have improved bargaining power, potentially reducing its costs as multiple suppliers engage in a price war to win orders.

An excerpt from Kuo's latest research note, obtained by MacRumors:
Apple and Qualcomm's end of patent dispute and entrance into a six-year licensing deal implies new 2H20 iPhone models will support 5G; Qualcomm and Samsung are potential 5G baseband chip suppliers: The market was worried that Intel's disappointing 5G baseband chip development might be the most severe uncertainty for the new 2H20 iPhone models' adoption of 5G. But we believe the uncertainty has been removed after Apple and Qualcomm's end of patent dispute and entrance into a six-year licensing deal, and Intel's announcement that it will exit the 5G baseband chip business. We expect Apple will likely adopt 5G baseband chips made by Qualcomm (focus on mmWave markets) and Samsung (focus on Sub-6GHz markets) for lowering supply risk, reducing costs and having better bargaining power.
Kuo believes that 5G will be a boon for both iPhone sales and Apple's supply chain in 2020. He forecasts total iPhone shipments of 195–200 million units in 2020, including 70–75 million 5G models released in the second half of the year.

Qualcomm was already the widely expected frontrunner for 5G modems in 2020 iPhones after Intel announced it is exiting the 5G smartphone modem business.


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Kuo Revises New 15-17″ MacBook Pro Launch to First Half of 2021, 31″ 6K Display Still Expected in Mid 2019

A few months ago, well-known analyst Ming-Chi Kuo outlined his expectations for new Apple products in 2019, including a 16 to 16.5-inch MacBook Pro, 31.6-inch 6K standalone display, and a 10.2-inch iPad. In a follow-up research note, however, Kuo has revised some of his details and timing.


Kuo now predicts that Apple will release a new 15- to 17-inch MacBook Pro in the first half of 2021 and a new 10- to 12-inch iPad between the fourth quarter of 2020 and the first quarter of 2021. He still expects the 31.6-inch 6K display to launch in either the second or third quarter of this year.

Economic Daily News chart based on Kuo note

Kuo's latest research note was first covered in Chinese by the Economic Daily News and MoneyDJ, so we're relying on a machine translation, and it is possible some details have been mistranslated. We'll update this article if necessary once we receive a first-hand copy of the note in English.

Kuo's original research note said the new MacBook Pro will feature an "all-new design." He also said Apple may add a 32GB RAM option to the 13-inch MacBook Pro. As for the 6K display, Kuo said it will have "outstanding picture quality thanks to its adoption of a Mini LED-like backlight design."

Kuo's original research note also called for several other new Apple products in 2019, including a trio of new iPhones with larger batteries and two-way charging, a new iPod touch, a new iPad mini, new AirPods, and the AirPower. Some of those products launched last month, while the AirPower was canceled.

Related Roundups: Apple Display 6K, MacBook Pro
Buyer's Guide: MacBook Pro (Caution)

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Ming-Chi Kuo Says ‘Worst Soon Over’ in Regards to Slowing iPhone Sales

Earlier this month, Apple lowered its revenue guidance for the first quarter of the 2019 fiscal year by up to $9 billion due to fewer iPhone upgrades than it anticipated, particularly in the Greater China region.


Apple analyst Ming-Chi Kuo, however, believes the "worst" will be "soon over" in regards to the slowdown. In his latest research note with TF International Securities, obtained by MacRumors, Kuo opined that the "share prices of Apple and most iPhone suppliers are generally priced in the negative."
Our report published on December 14, 2018, was the first to cut the estimation of 2019 iPhone shipments to 190mn units or less; the current market consensus on 2019 iPhone shipments (160–180mn units) is much lower than our estimation and we believe the share prices of Apple and most iPhone suppliers are generally priced in the negative.

We maintain our forecast of 188–192mn units for 2019 iPhone shipments. We believe the downside risks of share prices for the Apple and iPhone supply chain are limited in the near term given that 2Q19 iPhone shipments will likely be better than the market consensus.
Kuo has slightly cut his estimate for iPhone shipments in the first quarter of 2019 from 38–42 million units to 36–38 million units because the "demand for new models in China and emerging markets is lower than expected," but he believes the decline will begin to ease starting in the second quarter.

Specifically, he estimates iPhone shipments in the second quarter of 2019 will reach 34–37 million units, slightly higher than the market consensus of 30–35 million units. That would still be a roughly 14 percent decline on a year-over-year basis, but far better than an estimated 29 percent drop in the first quarter.

As long as the US-China trade war does not worsen, Kuo expects the improvement to continue into the second half of 2019, with iPhone shipments likely to be generally flat compared to the second half of 2018 thanks to stronger replacement demand, trade-in programs, and market share gain in European markets.

Kuo maintains his forecast of 188–192 million iPhone shipments in 2019.

Related Roundups: iPhone XS, iPhone XR

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Ming-Chi Kuo Says iPhone XR Demand Has Been Lower Than Expected, Slashes Shipment Estimates

iPhone XR demand has been lower than expected, according to Apple analyst Ming-Chi Kuo, who has slashed his overall iPhone shipment forecast by 20 percent for the first quarter of 2019. He now expects Apple to move 38-42 million iPhones in the quarter, down from his original estimate of 47-52 million.


Kuo, in a research note with TF International Securities, obtained by MacRumors:
We have reduced our 1Q19 iPhone shipment estimation by 20% to 38–42mn units (vs. our previous forecast of 47–52mn): We cut the 1Q19 iPhone shipment estimation again for the following reasons. (1) Lower-than-expected XR demand. We have reduced our 1Q19 XR shipment estimation to 15–20mn units vs. our previous forecast of 20–25mn units. (2) The increase in orders of legacy iPhone models cannot offset the decline of XR and XS series shipments because of the low season impact.
Apple reported sales of 52.2 million iPhones in the first quarter of 2018, which corresponds with the second quarter of Apple's fiscal year, so as few as 38 million units in the first quarter of 2019 would be a significant year-over-year decline.

For the iPhone XR in particular, Kuo has revised his shipment estimate to 15-20 million for the first quarter, down from 20-25 million.

Kuo estimates annual iPhone shipments will fall between 205 million and 210 million in 2018, and based on that, forecasts that annual iPhone shipments in 2019 will decline up to 10 percent to a range of 188 million to 194 million. This would fall below Wall Street's consensus estimate of around 212 million units in 2019.

While this news paints a pessimistic outlook for the iPhone, declining unit sales will likely be at least partially offset by the rising average selling price of iPhones. Apple's latest iPhone lineup is its most expensive yet, with the $349 iPhone SE discontinued and the iPhone XS Max topping out at $1,449 with 512GB of storage.

Kuo:
We believe that the iPhone ASP could at least keep growing YoY until 3Q19, and it will offset the YoY shipment decline. However, most suppliers will face growth challenges due to iPhone shipment decline. We believe that specific suppliers can grow, thanks to the component price increase or the ability to obtain new orders, but the visibility of the beneficiary list will not be clear until 1Q19 because some spec and order allocations of 2H19 new iPhone models are not confirmed yet.
Apple will no longer be disclosing unit sales in its quarterly earnings reports going forward, so investors will have to look towards iPhone revenue to determine how well the handset is selling. If unit sales are particularly bad, then a rising average selling price might not be enough to hide the weakness.

Apple has been aggressively marketing its latest iPhones. On its website, for example, the iPhone XR and iPhone XS take up the entire homepage with advertised starting prices of $449 and $699 respectively. However, each have an asterisk that leads to fine print that says pricing is based on an iPhone 7 Plus trade-in.


Apple's earnings results for the first quarter of 2019 will likely be released in May, so we're still some time away from real numbers.

Related Roundup: iPhone XR
Buyer's Guide: iPhone XR (Buy Now)

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Kuo: iPhone XR Pre-Order Demand Over First Weekend Exceeded That of iPhone 8 and iPhone 8 Plus

iPhone XR pre-order demand in the first three days of the device's availability was "better than that" of the iPhone 8 and iPhone 8 Plus during the same period last year, according to Apple analyst Ming-Chi Kuo.


In a research note obtained by MacRumors, Kuo said that although pre-order demand immediately after launch has been lower for the iPhone XR versus the flagship iPhone XS models, overall iPhone XR shipment momentum is "more stable" because it will drive more customers to upgrade than the iPhone 8 series over time.


Kuo added that iPhone XR shipping estimates on Apple.com (many models remain available for launch day delivery on Friday) do not indicate exact demand, as the type of customers interested in the device are more general users, with many ordering through carriers to take advantage of promotions.

More details to follow…

Related Roundups: iPhone 8, iPhone XR
Buyer's Guide: iPhone XR (Buy Now)

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Kuo: Apple Has Opportunity With iPhone XR in China as Chinese Rivals Face ‘Lower Than Expected’ Demand

In a research note obtained by MacRumors, Apple analyst Ming-Chi Kuo said cumulative smartphone shipments from four major brands on the Chinese market, including Huawei, Oppo, Vivo, and Xiaomi, declined 10 percent on a year-over-year basis during China's Golden Week, a national holiday and major sales period.

iPhone XR in (PRODUCT)RED

Kuo, writing on behalf of research firm TF International Securities, said the estimated 6.5-7 million shipments during Golden Week were "lower than expected." He called Huawei the "major winner" as the only brand with a year-over-year increase in shipments during the October 1-7 holiday.

The well-known analyst attributed the year-over-year decline to a lack of innovative selling points among Chinese-brand smartphones. Kuo is positive on the trends of triple-lens cameras and fingerprint sensors under the display in smartphones, but said only limited models currently support both functions.

Kuo also cautioned that the US-China trade war "may be affecting consumer confidence, which makes the replacement cycle longer."

A third reason is that some consumers—particularly existing iPhone owners—will opt for more affordable legacy iPhone models or wait for the iPhone XR, according to Kuo, who expects replacement demands for the iPhone XR in China will be better than last year's demand for the iPhone 8 and iPhone 8 Plus.

Extrapolating from Golden Week, Kuo said smartphone shipments in China in 2018 as a whole may be "lower than expected." He estimates shipments may decline 10-15 percent to 410 million units on a year-over-year basis.

Chinese brands have to rely on overseas markets for further growth, according to the research note, shared with investors Thursday. Kuo remains confident about Huawei's future shipment momentum because the brand has "the best competitiveness among Chinese brands in overseas markets," the note said.

As for Apple, the iPhone XR represents an opportunity for the company to increase its market share and revenue in the Greater China region, where it has faced increasing competition from the likes of Huawei, Oppo, Vivo, and Xiaomi.

With a lower starting price of $749 in the United States, the iPhone XR lacks some of the bells and whistles of the flagship iPhone XS and iPhone XS Max, including an OLED display and glass rear casing, but it has many identical tech specs and longer battery life than both of the more expensive models.

iPhone XR pre-orders begin Friday, October 19 in more than 50 countries, followed by in-store availability on Friday, October 26.

Related Roundup: iPhone XR
Buyer's Guide: iPhone XR (Caution)

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Kuo: iPhone XS Max Significantly Outselling iPhone XS, 256GB Most Popular, 512GB Subject to Serious Shortage

In a research note obtained by MacRumors today, Apple analyst Ming-Chi Kuo has provided updated launch-weekend takeaways for the iPhone XS, iPhone XS Max, and Apple Watch Series 4, all of which went on sale Friday.


Kuo says that iPhone XS Max demand is "better than expected," with the 6.5-inch model outselling the iPhone XS by three to four times. He says the 256GB storage option is most popular, with the 512GB configuration subject to a "serious shortage" due to Samsung being the only reliable supplier.
We have determined that the demand for XS Max is better than expected (3–4 times that of XS). The gold and space-grey colors are significantly more popular than the silver. 256GB is the most popular, and 512GB is subject to a serious shortage because only Samsung can currently ship NAND Flash well. We are positive that XS Max shipments will grow steadily in 4Q18 thanks to demand from Asia market and the gift season.
Kuo adds that Apple Watch Series 4 demand is "much better than expected," with supplies likely to remain tight until Compal begins mass production starting from November, as a secondary supplier alongside Quanta.
Apple Watch Series 4 demand is much better than expected. The capacity of the assembler Quanta is full already; therefore, the supply cannot improve significantly until second supplier Compal's mass production for Apple Watch Series 4 starting from November. We have increased the Apple Watch shipment forecast in 2018 from 18mn to 18.5–19.5mn units.
More details to follow…

Related Roundup: iPhone XS

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Kuo: Apple Watch Series 4 Pre-Orders Above Expectations, iPhone XS Seeing Lackluster Demand

Apple analyst Ming-Chi Kuo has issued a research note today, obtained by MacRumors, outlining his opinions about first-weekend pre-orders for the iPhone XS, iPhone XS Max, and Apple Watch Series 4.


Kuo says Apple Watch Series 4 pre-orders have been "better than expected," as a result of new innovative functions, such as electrocardiogram support. He predicts Apple Watch shipments will reach 18 million units in 2018, with the Series 4 lineup accounting for 50 to 55 percent of those orders.

If the ECG support expands to more countries, Kuo believes the Series 4 lineup could see even stronger shipment momentum.

In contrast, Kuo says iPhone XS pre-orders are "lower-than-expected," as customers opt for the iPhone XS Max or wait for the iPhone XR. Kuo has lowered his forecast for iPhone XS orders, believing the model will account for only 10 to 15 percent of shipments of the new 2018 iPhones, down from 15 to 20 percent.

Kuo says iPhone XS Max pre-orders have been in line with expectations, signifying the success of Apple's high-pricing strategy:
There is strong Chinese demand thanks to the gold casing, dual-SIM, and large display. The XS Max average shipping time is shorter than the 2H17 iPhone X (1–2 weeks vs. 2–3 weeks), which we think is due to supply improvements. We maintain our forecasts that the XS Max will account for 25–30% of 2H18 new iPhone model shipments.
Kuo sees a positive outlook for the iPhone XR, available to pre-order October 19, given its lower pricing and dual-SIM support in China.

The well-known analyst increased his forecast for iPhone XR orders, estimating that the model will account for 55 to 60 percent of shipments of the new 2018 iPhones, up from 50 to 55 percent previously.

"We estimate the shipment peak of XS Max and XS will be in October and XR will start shipping and benefiting supply chain momentum in October," said Kuo.

iPhone XS, iPhone XS Max, and Apple Watch Series 4 pre-orders began Friday.


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