Munster: How 5G will float Apple's boat

Philip Elmer-DeWitt

“In our view, Apple will be one of 5G’s biggest beneficiaries.” — Gene Munster


From a note posted to Loup Ventures subscribers Wednesday:

5G Tide to Lift Apple: The 5G hype has already begun, but investors underappreciate the opportunity that it represents for most tech companies. Apple has four initiatives that will materially benefit from 5G: iPhone, augmented reality, healthcare, and autonomous vehicles. In our view, Apple will be one of 5G’s biggest beneficiaries.

The Significance of 5G for Apple: 4G seems fast enough, so why do we need 5G? It’s not just about speed, it’s also about latency. Data will be delivered instantaneously. At first, the use cases will be subtle, like instant app downloads and 4K video streaming. The mobile phone experience will be better, but won’t be revolutionary. Over time, that will change. Real-time data will allow new phone designs, new apps, off-device storage, and processing in the cloud for AI applications, game streaming, and other compute-intensive mobile use cases. The smartphone is just one area that will benefit from low-latency, high-speed data. 5G will enable or vastly improve augmented reality, wireless virtual reality, countless IoT and smart home applications, autonomous vehicles, and V2X communication, to name a few.

The 5 Year 5G Transition: It’s important to note that the rollout of 5G will take time. We expect it will take until the end of 2022 before 75% of the US population will have 5G service. Investor interest and the resulting rise in tech valuations will precede the adoption curve by about a year. In other words, shares of AAPL should start to see an impact starting late in 2019, potentially lasting until the end of 2024.

My take: Conventional wisdom on 5G, for what it’s worth, is that Apple has already missed the boat.