New iPhone Expected to Hurt PC Makers and LTE Phones

Source: Apple iPhone 4S | Official Website

J.P. Morgan’s Mark Moskowitz predicted that the launch of Apple’s next-generation iPhone later will have major implications in the personal electronics market. It could also make existing LTE smartphones appear bulky and subpar, while taking away sales from PC makers, such as Dell and Hewlett-Packard.

Winners and Losers of the Technology “Food Chain”

According to Moskowitz, some of the biggest losers in the upcoming launch of the next-generation iPhone are the existing 4G LTE mobile phones in the market. It could also hurt the Windows-based PC makers, as the upcoming handset will “sustain the land grab of smartphones taking IT dollars from PCs, dampening PC-related growth prospects at Dell, Hewlett-Packard, and other PC makers.”

The smartphone’s turn-by-turn navigation that is available in the Maps application for iOS 6 could also pose negative effects on existing GPS service providers, including TeleNav, TeleCommunication Systems, and Garmin.

As for wireless carriers, an increase in demand could not be favorable on their margins. However, it could accelerate the upgrade cycle to 4G LTE in the long run. This is a positive projection for mobile carriers, especially those in the United States that is currently dominated by a slower 3G-equipped phones.

On the other hand, 4G still has a vague impact in Europe, since it is still yet to be known whether the next-generation iPhone will support European LTE frequencies. Regardless, Moskowitz believe that it will not be disruptive when it comes to Europe’s 4G LTE market.

Despite that, the much-awaited mobile phone is believed to mark a few secular growths in the semiconductor industry. With strong demands for the device, component suppliers like Fairchild Semiconductor, Qualcomm, and Avago are expected to see benefits in the second half of this year.

The next-generation iPhone is also expected to benefit LG Display, which is believed to be the supplier of in-cell touchscreen panels. The handset’s announcement could also bring something favorable to Samsung Electronics and LG Innotek, which builds the mobile phone’s custom processor and camera modules respectively.

Apple’s Next-generation iPhone in the Horizon

Last Monday, J.P. Morgan said that strong sales of Apple’s next-generation iPhone could boost the gross domestic product of the United States. Economist Michael Feroli estimated that sales could add between 25 and 50 percentage point to the annualized U.S. GDP growth for the last quarter of this year.

Moskowitz expects that Apple’s next-generation iPhone, which will be announced later at 10 a.m. Pacific Time in a special media event, will provide better battery performance in a smaller form factor. This could then label competing devices as battery and pocket “hogs.”

Leave a Comment