The report also suggests Broadcom (AVGO - Get Report) , which last week cut its sales guidance for its current fiscal year by $2 billion due to both a Huawei parts ban and weaker demand from other clients, will see its chip sales to Apple bounce sharply next year.
Apple's Reported 2020 iPhone Plans
Analyst Ming-Chi Kuo, who has had a fairly high accuracy rate over the years when it comes to Apple product scoops, says that Apple plans to launch 5.4-inch and 6.7-inch flagship iPhones in 2020, along with a new, relatively low-cost, 6.1-inch iPhone (by comparison, the iPhone XS and XS Max have 5.8-inch and 6.5-inch displays, respectively).
In line with prior reports, Kuo says that, unlike the 6.1-inch iPhone XR, which sports an LCD display, the cheaper iPhone will join its costlier siblings in using an OLED display. However, he adds that Apple will only place 5G radios within its flagship iPhones in 2020, before including them within all of its 2021 iPhones.
Qualcomm (QCOM - Get Report) , whose patent-licensing deal with Apple was accompanied by a "multi-year" chip supply deal, is forecast to be the modem supplier for all three 2020 iPhones. This prediction contrasts a bit with a prior report from Kuo, in which he forecast that Apple will "likely" use both Qualcomm and Samsung's 5G modems next year.
As Apple steps up its hiring of wireless engineering talent and reportedly holds talks with Intel (INTC - Get Report) about acquiring the chip giant's German modem engineering teams, Kuo says Apple's own 5G modem will be ready for use in 2022 or 2023.
Notably, whereas Apple's non-5G iPhones have featured just three power amplifier modules to help transmit mobile radio signals -- in the case of next year's 6.1-inch iPhone, Skyworks (SWKS - Get Report) is expected to supply two of the modules and Broadcom the other -- Kuo's report indicates that next year's flagship iPhones will have at least nine of them, thanks to the inclusion of six Broadcom modules for sub-6GHz 5G spectrum bands.
There could be additional RF front-end modules on top of those nine, assuming that Apple (like peers) also wants to support millimeter-wave (mmWave) 5G spectrum, which has limited range but is capable of very high transmission speeds. Qualcomm, which has reported landing many design wins for mmWave antenna modules within devices using its 5G modems, could be the supplier here.
At the same time, with Kuo saying his firm believes Apple's deal with Qualcomm gives Apple access to 5G modem source code that it can use for developing its own 5G RF power amplifiers and front-end modules, Apple might be looking to use its own RF modules in time.
Assuming it pans out, Kuo's report suggests Apple is eager to win over fans of smaller iPhones by launching a 5.4-inch model next year, and wants to use 5G as a selling point for both flagship models. Judging by prior reports, a 3D rear-camera system (it could both improve image quality and let users capture 3D models of objects) might also be a selling point for next year's flagship iPhones.
The report also indicates that Broadcom -- whose wireless chip sales have been recently pressured by the Huawei parts ban, smartphone sales declines and (quite possibly temporary) 4G RF share loss to Qorvo (QRVO - Get Report) within 2018 iPhones -- will see its RF chip sales to Apple jump in 2020. Last week, Broadcom disclosed a new two-year RF chip supply deal with Apple and suggested it expects its average RF content per phone to grow by 5% to 10% over the next two to three years.
In addition, Kuo's report drives home the large opportunity that 5G presents for RF chip suppliers in general. At a time when Broadcom, Skyworks and Qorvo are trading at fairly low forward earnings multiples, markets might not fully appreciate how this opportunity can help the companies grow their mobile chip sales in the coming years, even if smartphone unit sales remain sluggish.