Apple may be preparing to delay the launch of its first 5G iPhones, fearing the coronavirus pandemic and a global recession could severely limit demand.
With most of its employees now working from home – along with millions of others across the world – Apple may be preparing for a delayed release of its next flagship phones. According to Nikkei Asian Review, sources within the company fear that the ongoing pandemic will severely lower global demand for its first 5G iPhones.
The publication reported that staff at Apple headquarters in California are discussing a delay that could span a number of months after its expected September release. A date will reportedly be decided once California lifts its order for all non-essential workers to stay at home.
“Supply chain constraint aside, Apple is concerned that the current situation would significantly lower consumer appetite to upgrade their phones, which could lead to a tame reception of the first 5G iPhone,” said one of three sources to Nikkei Asian Review. “They need the first 5G iPhone to be a hit.”
Another source said: “The discussion is still at an early stage, and the fall launch is not completely off the table. But the 5G iPhone could be postponed to 2021 in the worst-case scenario.”
Apple is closely monitoring coronavirus outbreaks across the world, in particular in the US and Europe, which remain two of its largest markets, accounting for more than half of iPhone sales.
Another source close to the discussions told Nikkei Asian Review that a decision is unlikely to happen until at least May. Apple refused to comment on the matter.
Possibly bigger than supply chain issues
5G iPhone prototypes close to the finished product were expected to be ready by the beginning of March, but the rapid pace of the pandemic has placed this on hold. Meanwhile, some Apple suppliers have not been notified of a potential change in roll-out.
An analyst with the research firm IDC, Joey Yen, said a delayed release raises fears that Big Tech does not see the global economy recovering after the pandemic has subsided.
“If any big tech company like Apple delays its plan for important new products … the issue could be even bigger than whether the supply chain could meet its schedule,” he said.
“It implies that they really see end demand weakening and the whole economy not recovering soon.”
Earlier this month, Apple CEO Tim Cook said the company was to donate millions of masks to healthcare professionals in Europe and the US to assist efforts to limit the spread of the coronavirus.
“Our teams at Apple have been working to help source supplies for healthcare providers fighting Covid-19,” he tweeted. “We’re donating millions of masks for health professionals in the US and Europe. To every one of the heroes on the front lines, we thank you.”