The ongoing fallout from the coronavirus means pressure is higher than ever for Apple's iPhone 12 to be a runaway success

Hollis Johnson/Business Insider

Apple's iPhone 11 Pro Max and 11 Pro

• As the coronavirus continues to spread, causing uncertainty around Apple's business and product launches, investors and analysts will be looking to the iPhone 12 for some certainty.
• Expectations for the iPhone 12, which is said to be Apple's first 5G iPhone, have been high for months - long before the coronavirus and even ahead of Apple's iPhone 11 launch.
• But the ramifications of the coronavirus outbreak, which has caused Apple to revise its Q2 2020 revenue guidance and cancel its WWDC conference, will only ramp up pressure for the iPhone 12 to succeed.
• Investors will look for reassurance that the fallout from the coronavirus are short-term impacts that don't affect Apple's long-term performance.
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As the coronavirus outbreak continues to spread, infecting more than 100,000 people around the world and forcing major corporations to reassess how they conduct business, it's hard for any company to think about anything else.

That has held especially true for Apple, which is grappling with lower-than-expected revenue for the March quarter and has been forced to rethink how it holds major events and product launches because of the pandemic. Most recently, it also closed all of its stores outside of China until March 27 as part of an effort to slow the pandemic.

The iPhone 12, as Apple's next iPhone is expected to be called, will likely be tasked with easing a lot of those concerns, as bullish investors and analysts look to Apple's much-hyped 5G iPhone to reaffirm their generally positive long-term outlook on the company.

The truth is, however, that there's been a lot riding on Apple's next iPhone for months, long before the coronavirus happened and even ahead of the iPhone 11's September launch.

The iPhone 12 has seemingly become a catch-all solution for Apple's many problems, from slowing iPhone sales to coronavirus-related slowdowns in consumer demand and supply chain disruptions. Now, the ongoing coronavirus outbreak and the impact it's had on Apple's business means there's even more pressure and anticipation surrounding what the company has in store this fall.

Wedbush Securities analyst Daniel Ives reiterated this in a recent report to clients on Friday, in which he noted that although supply chain issues and softened demand in China are near-term obstacles, the coming upgrade cycle in September is much more important to Apple's business. The expected revenue miss for the March quarter because of coronavirus-related setbacks, which Apple announced in a warning to investors in February, is a "shock event," not a trend, writes Ives.

"In a nutshell, this remains a major holding time for investors in Apple and clearly there will be some speed bumps along the way as Cupertino navigates the coronavirus outbreak," Ives wrote. "However, we continue to focus on the golden installed base, pent up iPhone upgrade demand activity, and 5G super cycle (remains intact) on the horizon as key to our bull thesis."

A new iPhone to cure all woes

UBS' Timothy Arcuri shared a similar sentiment in a note from late February, writing that investors are "more focused on the fall launch" than Apple's revised revenue guidance.

"I think once we get to the next season's model, once we see the 5G model out there, I think people will forget all about what's going on now," Robert Muller, an enterprise hardware analyst for RBC Capital Markets, also previously said to Business Insider in February.

Expectations for the next iPhone have been riding high for quite some time. In November, a report from Strategy Analytics suggested that Apple could surpass rivals Samsung and Huawei to lead the market for 5G smartphones - even though both of the companies have beaten Apple to the market.

Other than 5G connectivity, Apple's iPhone 12 is expected to represent a dramatic departure from Apple's current lineup. It's expected to feature a new design, 3D cameras for better augmented reality, and an in-screen fingerprint sensor among other features.

Analysts from firms like Morgan Stanley, Canaccord Genuity, and Raymond James also wrote last August that the 5G iPhone would be exactly what Apple needs to bring the iPhone back to growth and ignite upgrades.

Of course, that was before the iPhone 11 and 11 Pro debuted and performed better than expected, prompting Apple's iPhone business to rise year-over-year after a string of declines. It's worth noting, however, that Apple had a notably weak quarter in its first fiscal quarter of 2019 as iPhone sales cratered by 15%, setting a low bar for Apple to clear in Q1 2020.

Regardless, given how unpredictable the coronavirus and its ramifications on Apple's business have been, investors will undoubtedly be looking to Apple's 5G iPhone for some certainty.

"It's the uncertainty," Muller previously said back when Apple announced it would miss its Q2 revenue guidance. "The market hates uncertainty."

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