Verizon Winner in IPhone 12 Launch; 5G 'Supercycle' Unlikely: Moffett

Apple’s iPhone 12 launch likely isn't the beginning of a “supercycle” for 5G, which is “still far away from real relevance,” MoffettNathanson’s Craig Moffett wrote investors Wednesday. Any bump in iPhone sales will likely be due to pent-up demand for upgrades and replacements in the lengthening handset replacement cycle, but that will “burn off fairly quickly,” said the analyst: “New and better cameras are great, but the real 5G cycle is at least a year or two away.” Verizon is the “big winner” of Apple’s decision to go all-in on millimeter-wave for its quartet of 5G iPhone 12 models, launched Tuesday (see 2010130043), said Moffett. Apple supports both of Verizon’s main millimeter-wave bands, 28 GHz and 39 GHz, he noted. The surprise cameo from Verizon CEO Hans Vestberg at the virtual launch event could mean Apple sees millimeter-wave as a “differentiator,” said the analyst. “But Apple’s support for mmWave may reflect the uncomfortable reality that 5G in any spectrum band other than mmWave is basically just LTE with a new name,” Moffett said. T-Mobile and AT&T already offer nationwide 5G in low frequencies to attain coverage, “but the small block widths for the spectrum mean that the user experience is not really any better than 4G." AT&T’s iPhone trade-in offer -- a free 5G iPhone for trade-in of an iPhone 8 or later, is a “preemptive race to the bottom,” he said, saying that what he sees as a net subsidy above $600 “strikes us as rather steep.” Verizon’s trade-in deal -- the $799 iPhone 12 for $15 per month and the $699 iPhone 12 mini for $12 per month with trade-in and 24-month contract -- “seems positively pedestrian by comparison.” The iPhone 12 rollout will accelerate a new round of 5G “map wars” as carriers try to “maximize perception for the breadth and depth of the new technology platform,” Citi's Michael Rollins wrote investors Wednesday: The “switcher pool and churn” will pick up in Q4, favoring “insurgents over incumbents.”