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Apple is expected to unveil its new 5G-capable iPhone 12 on Tuesday with investors eyeing how the new product line-up will drive top sales growth in the near-term. It could be the most important event in several years for Apple as it seeks to drive an upgrade supercycle.

Recent earnings from Apple show consumers are a long way from any kind of smartphone or device fatigue – the question is whether 5G is the moment to unleash further demand for iPhones. Meanwhile, we should be careful about ignoring other products set to be released which continue to help cement Apple’s ecosystem loyalty.

The event, screening exclusively online from 10 am Pacific time on Oct 13th, is expected to mark Apple’s delayed and long-anticipated launch into the 5G space. Whilst it’s behind the curve of several manufacturers on this front, penetration rates for 5G phones have not been significant yet.

In many ways, we’ve very much been waiting for Apple to get this party started. Moreover, 5G networks are in early stages. I would anticipate that this is the moment many Apple users have been waiting for and it could mark a device upgrade supercycle as we saw with the X.

Apple’s iPhone refresh will be the first major update since the launch of the X in 2017. Apple is expected to announce four new iPhone devices with a range of sizes and a design that takes its inspiration from the iPad. There will be a number of other ancillary product releases, too, but all that matters for the shares will the reception to the iPhone.

Whilst we have no pricing detail right now, it will be important to watch where Apple chooses to price the new models. We note that the X saw Apple increase its prices without any material loss of momentum in sales. It seems likely that Apple will retain its premium status but release some cheaper iPhones at the lower end of the market.

Sentiment: analysts remain bullish on AAPL but the Insiders signal is bearish. Whilst the stock has slipped since the 4-1 split in late August, this occurred against the backdrop of a broad-based sell-off in the tech sector during the month of September and it remains up around 60% for the year.

Apple share activity

Dan Ives at Wedbush said this is “once in a decade” opportunity for Apple with a third of the almost 1bn iPhones in global use due for upgrade.

“Taking a step back we believe iPhone 12 represents the most significant product cycle for Cook & Co. since iPhone 6 in 2014 and will be another defining chapter in the Apple growth story looking ahead despite a softer consumer spending environment in our opinion,” he said.

Apple shares' analyst consensus.

Apple shares tend to perform solidly in the 60 days after iPhone launch events, albeit this did not happen 2008, 2012, and 2016. Shares rose 3% in pre-market trading on Monday ahead of the event.

Apple will deliver its fiscal fourth quarter earnings on Thursday, Oct 29th. In Q3, the company posted quarterly revenue of $59.7 billion, an increase of 11% from the year-ago quarter, and quarterly earnings per diluted share of $2.58, up 18%. International sales accounted for 60% of the quarter’s revenue and it is expected that non-US iPhone demand will be a key driver in the coming quarters.

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