The 5G technology movement is well underway. Apple is already boosting its product offerings to accommodate the move, opening up opportunity for leveraged ETF traders.
The Direxion Daily 5G Communications Bull 2X Shares (TENG) will look to benefit. The BlueStar® 5G Communications Index that TENG tracks provides exposure to companies whose products and services are economically tied to the market’s adoption of 5G networking and communication technologies.
Apple, one of TENG’s holdings, is poised to boost its iPhone production in the wake of 5G’s rollout.
“Apple is asking suppliers to ramp up production of its next-generation iPhones by 20%, according to Bloomberg,” a CNBC report said. “The stark increase from its 2020 production numbers comes despite last year being what the phone maker considered to be a ‘super cycle,’ driven by new 5G models that offered consumers access to the improved, faster wireless networks offered by carriers.”
A Wave of Upgrades Ahead?
With 5G technology’s ability to handle large swathes of data, the user’s multimedia experience could be enhanced. This may encourage more users to upgrade their mobiles devices.
Per the CNBC report, “Credit Suisse analysts said in a note Wednesday that 5G will continue to drive upgrades as carriers expand their footprint of the new faster networks around the world. They added that there are more reasons for regular consumers, as opposed to just early adopters, to buy an iPhone with 5G.”
The global investment firm is expecting that iPhone sales will top 234 million units this year, 237 million units in 2022, and 249 million units in 2023.
“We have seen good momentum in the iPhone 12 cycle with a richer mix along with unit growth off a lower base,” Credit Suisse analysts said in the note. “We remain bullish on 5G as a catalyst for iPhone upgrades over time, but believe the momentum will likely slow from here with focus shifting from early adopters skewing towards Pro models to mainstream penetration within Apple’s >1 bn iPhone user base as 5G coverage and use cases mature.”
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