Next year could mark a turning point for Apple's iPhone as it seeks to rebound from slumping iPhone revenue and reclaim its spot as the No. 2 smartphone maker worldwide — a position it recently lost to Chinese electronics giant Huawei.
Apple expects iPhone sales to return to growth next year following the launch of its 2020 iPhones, all three of which are expected to support 5G, according to a new report from Bloomberg. The company reportedly plans to ship 200 million phones in 2020, which will be fueled by the launch of four new iPhones, says the report. That includes the three new flagship models it usually launches every September and a successor to the cheaper iPhone SE, which it's rumored to launch in the spring.
The expected successors to the iPhone 11, 11 Pro, and 11 Pro Max will include Qualcomm's X55, one of the newest 5G chips on the market, and what has been referred to as the "world's most advanced" 5-nanometer chip technology made by Taiwan Semiconductor Manufacturing Co., according to a new report from Nikkei Asian Review. The report adds that Apple and Huawei are the only smartphone makers planning to use this 5-nanometer chip-production technology in 2020.
These expected changes — as well as previously reported upgrades that would make the iPhone better at running augmented reality applications — suggest that the new features coming in next year's iPhones could be more impactful than those introduced in the iPhone 11 and 11 Pro. That's as important as ever for Apple as it seeks to boost sales of the iPhone, the company's most profitable product, as smartphone sales decline across the industry.
The ability to connect to 5G networks alone could motivate consumers to upgrade, especially those who want a phone they can hold on to for three to four years as 5G networks in the United States continue to develop. Other than 5G connectivity, next year's iPhones are expected to include a 3D camera capable of scanning the world around you to enable more realistic augmented reality experiences, according to Bloomberg.
Such an addition could also help lay the foundation for the company's next big product — Apple's long-rumored augmented reality headset. Apple is said to be working on a dedicated augmented reality headset with its own operating system, as Bloomberg first reported in 2017. The company may also be readying an AR accessory for the iPhone next year, as TF International Securities analyst Ming-Chi Kuo previously reported in a note obtained by 9to5Mac.
If Apple is indeed expanding its hardware lineup to include new AR gadgets, it sounds like the next iPhone may play an important role in bringing that vision to fruition by getting Apple's massive installed base of iPhone users more interested in the technology.
Apple's iPhone 11 and 11 Pro certainly offer noticeable updates over their predecessors, especially when it comes to their cameras. All three of Apple's new iPhones now have an ultra-wide-angle camera that can take photos with a significantly broader perspective, and the iPhone now has a night mode that puts its camera on par with that of Google's Pixel phones. Plus, they all run on faster processors than before.
While these are welcome improvements that have helped the iPhone keep up with and potentially surpass rival products from Samsung and Google, such changes may not be enough to convince iPhone X and iPhone XS owners to upgrade. They also represent more immediate upgrades rather than ones that will help future-proof the iPhone for years to come.
Wall Street analysts have taken a similar stance in the past. Following Apple's third-quarter earnings report at the end of July, several analysts wrote that they viewed the 2019 iPhones as an incremental update, while the 2020 models would serve as a more significant catalyst for growth.
Across the industry, it's getting increasingly difficult to convince consumers to upgrade their smartphones now that premium devices usually cost anywhere between $700 and $1,000 or more. Smartphone makers like Apple have felt the impacts of this shift: iPhone revenue continued to decline in the company's fiscal third quarter, as the firm announced in July that iPhone revenue had dipped by 12%. Apple reports its fourth-quarter earnings on Wednesday after the market closes.
Apple also recently slipped behind Huawei, the Chinese tech behemoth that was barred from working with United States companies over cybersecurity concerns earlier this year. The International Data Corporation reported in April that Huawei surpassed Apple to become the second-largest smartphone maker worldwide, adding that it was the only vendor that saw volumes grow in the first quarter of 2019. In August, market research firm IHS Markit reported that another popular Chinese electronics firm Oppo also surpassed Apple when it comes to smartphone shipments, bumping it down to fourth place in the second quarter of 2019.
It's impossible to know exactly what's in store for Apple's next iPhone until the company officially makes an announcement. But what's certain is that come September, analysts and industry-watchers will be looking to Apple's first 5G iPhones to help the company re-establish its grip on the market.