Apple’s hardware TAM should grow to US$300 bn by 2023, led by iPhone. Our proprietary iPhone installed base model projects stable replacement rates at 2020 levels of 4.3 years to drive 234/237/249 mn units over 2021-23, as 5G shifts from tech-savvy early adopters that skewed towards “Pro” models to more mainstream consumers, which should drive a more normalised ASP mix ahead. We project iPhone growth (60% of Apple’s hardware sales), expansion of wearables and rising Mac competitiveness to grow the Apple hardware TAM from US$237 bn in 2020 to US$300 bn by 2023. 

iPhone experience continuing incremental improvements. The key focus of near-term upgrades will be evolutionary but still improve the camera (image stabilisation, larger sensors, improved wide angle), display (faster refresh) processor (enabling AI, multimedia/graphics, and app development) and RF (more mmWave, Wifi 6E), and smaller notch. In the next 1-2 years, we do see more incremental improvements including removal of the unpopular notch, side/underdisplay fingerprint, telephoto lens, larger SE and foldable function.