Munster: Apple Is The Best Way To Invest In The '5G Cycle'

The fifth-generation technology standard for cellular networks, commonly known as 5G, is set to revolutionize the communications industry, and the rollout has already begun.

Apple Inc AAPL is likely to be a key beneficiary of the new tech on the block, according to Loup Ventures' Gene Munster.

Living Up To The Hype: Although the COVID-19 pandemic has relegated the topic of 5G rollout to the backburner, it will more than live up to its previous hype, Munster said in a post. 5G-enabled real-time data will engender a whole new ecosystem, comprising new phone designs, new apps, off-device storage, processing in the cloud for AI applications, game streaming and other compute-intensive use cases.

Munster also sees 5G aiding advancement in new-age technologies such as augmented reality, wireless virtual reality, IoT and smartphone applications and autonomous vehicles, along with vehicle to vehicle communications.

With wireless carriers slowly rolling out 5G infrastructure, about one-third of U.S. consumers are likely to have reliable access to 5G by the end of 2022, Munster estimates.

Apple A 5G Winner:  The first segment to see a lift from 5G will be phones, and Apple is best positioned to be the winner in the 5G devices category, Munster said.

"Specifically, Apple should enjoy its biggest smartphone upgrade cycle since iPhone 6 when iPhone unit growth went from 13% in FY14 to 37% in FY15," he wrote.

Apple, though expected to launch its first 5G-enabled phone this fall, is likely to see some downside to current fiscal year 2021 estimates due to limited network coverage tempering consumer demand, according to Munster. However, he's bracing for three years of likely upside for estimates following the lukewarm 2021.

Munster also noted that Apple's three other initiatives – augmented reality, digital health, and the remote possibility of a play on autonomous vehicle – will benefit: "In our view, Apple is the best way to invest in the 5G cycle."

Apple's stock hit a record intra-day high of $354.77 Wednesday.

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