Raymond James upgrades Apple stock to $250 on 2020 iPhone promise

Apple's use of a 5G modem in the 2020 iPhone could trigger high sales for the smartphone generation, Raymond James suggested while upgrading their rating of Apple shares, but the firm is still concerned the 2019 cycle will be "the weakest in years."

On Thursday, Raymond James advised to investors it has upgraded Apple's shares from "market perform" to "outperform," as well as setting a price target of $250 for the iPhone maker. The decision was largely driven by the potential of the 2020 iPhone, which is set to include a 5G modem.

Analysts at the company have "increased conviction in the impact of a 5G iPhone product cycle in 2020," reports CNBC, in part due to the settlement between Apple and Qualcomm that will allow the use of the latter's modems.

"Our more recent checks suggest that Apple plans to bring 5G to a wider range of iPhone models, which is different from their plan when they had intended to use Intel's modem," the firm believes.

Raymond James does temper the expectations, warning "Our call may well be early - we expect this year's iPhone cycle to be the weakest in years, and today may not be the right time to buy ahead of that weakness. But since the near-term moves are being driven by macro conditions as much as fundamentals, we've decided to upgrade now and let our clients decide the best time to execute on our idea."

Du to the introduction of 5G across many carriers around the world, and the slow influx of 5G devices, analysts are generally predicting poor sales of the 2019 iPhones, which are not expected to have 5G. It is thought consumers may wait until Apple ships models using the cellular standard before upgrading, which may affect 2019 sales.

Apple is thought to be working on its own 5G modem, but an iPhone using it may not be released until 2022 or 2023.

Aside from 5G, the 2020 iPhone is thought to include three OLED models instead of two OLED and one LCD, and is also tipped to include a smaller notch at the top of the display.

Latest Exclusives

Latest comparisons

45 Comments

williamh 1045 comments · 13 Years

About 5 years ago

Will people care much about 5G in 2019 or even 2020? Most of us won’t have 5G service available for some time still.

80s_Apple_Guy 291 comments · 8 Years

I'm not sure I care about 5G yet but I am very much waiting to get QC modems back instead of the Intel junk.

GeorgeBMac 11421 comments · 8 Years

williamh said:

Will people care much about 5G in 2019 or even 2020? Most of us won’t have 5G service available for some time still.

That feeling ("If I can't use it today, then it is worthless") is only relevant to those who only keep their phones a year -- or two at the longest.
For the real world, they want a phone that won't obsolete itself a third or quarter of the way through its life-span.

mubaili 454 comments · 13 Years

You would use all your data allocation is 1 hour under 5G. Apple need to become a carrier.

AppleInsider said:

Du to the introduction of 5G across many carriers around the world, and the slow influx of 5G devices, analysts are generally predicting poor sales of the 2019 iPhones, which are not expected to have 5G. It is thought consumers may wait until Apple ships models using the cellular standard before upgrading, which may affect 2019 sales.

Anybody planning on keeping their phone more than a year or two will, or should, fall into this category.

On the other hand, while it is clear that Apple will not be able to include a 5G capable modem in the phones it rolls out in 2 months, there is not much basis to assume that Apple will delay that roll-out for another 14 months -- simply to stick to some preordained schedule.

Currently, the only technical reason for not having a 5G capable phone is being able to incorporate Qualcomm's 5G capable modem into one or more of their phones. But that limitation is minor and short lived. After that, the only road blocks will be administrative and marketing policies -- and Apple, historically, has trampled all over that nonsense.

Essentially, there is NO reason, no good reason, to wait till the end of 2020 for a 2020 phone. Apple should release a 5G capable phone in the first half of next year -- possibly the first quarter. Meanwhile, I agree: Their 2019 phones will take a major hit simply because they aren't going to offer much in comparison to the 2018 phones -- so why "upgrade" if the upgrade is merely in name only? (American auto manufacturers pulled that "new and improved" scam for decades till the Japanese crushed them).