Credit: Hasan Kaymak

Since a 5G iPhone needs a 5G network to actually run on, a major appeal of Apple’s “iPhone 12” could be hampered by the carriers not getting their 5G networks up to speed as quickly as they’ve been promising, and at least one reputable analyst is suggesting that investors should temper their enthusiasm accordingly.

Speaking with CNBC, Loup Ventures’ managing partner Gene Munster actually went so far as to suggest that investors may be disappointed with the first year of the 5G iPhone, stating that while it’s a “massive opportunity for Apple” the availability of coverage from major carriers could throw a wrench into the sales figures that some have been projecting for the “iPhone 12” lineup.

Ultimately, this is a massive opportunity for Apple, huge play on 5G, but it’s going to take a while for networks to roll out coverage.

Gene Munster, managing partner, Loup Ventures

Munster’s comments have thrown some cold water on the predictions by other analysts and supply chain sources that have suggested Apple will dominate the 5G smartphone market next year, at least temporarily eclipsing Samsung, and could even break records with 100 million iPhones sold in 2020. However, Apple had good reasons for not rushing to produce a 5G iPhone this year, and it’s entirely possible that some of those reasons — specifically carrier support — could still apply next year.

Are Carriers Overpromising 5G?

U.S. carriers have been making a lot of big promises about getting 5G coverage rolled out across the country, but their progress has been slower than many had hoped. AT&T’s 5G went live in only 10 cites last week, and while T-Mobile has just launched its nationwide 5G network, it’s the 600 MHz “low-band” 5G that piggybacks on LTE and therefore may not offer the kind of blazing fast speeds that many are expecting 5G to deliver. Meanwhile, Verizon has promised to have half of the U.S. covered with 5G by 2020, but its rollout is progressing more slowly. There’s also the possibility that some carriers could charge extra for faster 5G service.

There definitely seems to be pent up demand for a 5G iPhone, which has left many analysts expecting sales to skyrocket next year; a recent Piper Jaffray survey suggested that 23% of current iPhone owners would spend $1,200 to upgrade to a 5G iPhone, which is about 5% more than the last time iPhone users were polled a few months ago. However, many are looking only at the demand for the 5G iPhone itself and not really factoring in whether the actual carrier support will be there; without a fast 5G network for the “iPhone 12” to run on, there’s going to be far less incentive for users to upgrade, and it could be even worse if the “low-band” 5G that is available doesn’t offer a noticeable enough advantage over existing LTE networks.

Munster believes that the carriers are being optimistic and overpromising on their coverage targets. He’s skeptical that they’ll meet these goals by the time the “iPhone 12” is released next fall, which could affect sales. He adds that such disappointing sales would rest “largely on the shoulder of the carriers” but would affect Apple’s bottom line nonetheless, and believes investors need to manage their expectations.

That said, Munster still believes Apple stock will continue to be strong in 2020. Even if iPhone sales aren’t as great as some are hoping, the company’s diversification into services such as Apple TV+ and Apple Arcade have given it new sources of revenue, not to mention that it has other hit products such as AirPods that are flying off the shelves in stores. Munster still says that he expects Apple to be one of the best performers next year, if not the top tech performer overall, with its stock easily reaching into the $350–$400 range.