Just like when 4G LTE connectivity was launched, Apple is skipping the first wave of next-generation wireless services. Although this may not be a problem in the US where it is not expected that the 5G service across the country will be launched until the middle of next year, is a problem in China. Reports say that giving up 5G this year, Apple does not have the opportunity to increase its market share in the country, which will soon experience its biggest smartphone replacement cycle over the years.
Some analysts claim that Apple will not really lose sales to consumers in China until next year. That’s when it’s assumed that sales of 5G-enabled phones will really take off in the country. Apple faces stiff competition in the region it must not face in the US. Innovative domestic manufacturers such as Huawei, Oppo, and Vivo feature new designs and features that include reverse wireless charging, emerging automatic cameras, zoom cameras without loss of leaks and huge batteries, while other Chinese manufacturers like Xiaomi are aggressive in terms of prices. During the second quarter of this year, Apple was the only non-domestic company among the top five smartphone manufacturers in China with a 5.8% portion of the pie.
At least one analyst expects Apple to fall into the top five in China during the second half of 2020. Canalys research analyst Jia Mo says: “It remains to be seen if iPhone 11 can offer technology innovations to offset some disadvantages in hardware, like lack of 5G support”. Apple has made some significant improvements to the cameras of the new models, adding an ultra-wide snapper to both the iPhone 11 series and the iPhone 11 Pro series. Improved battery life from one to five hours in 2019 models; iPhone 11 and iPhone 11 Pro can dive to depths of 6.5 feet and just over 13 feet (up to 30 minutes) respectively. This doubles the water protection found in the 2018 iPhones. Only time will tell if these improvements will be enough to increase iPhone sales in China next year.
Apple will miss at least six months of an important smartphone replacement cycle in China
The next high-end phone from Huawei, Mate 30 Pro, will be the first to use the company’s Kirin 990 chipset, which includes an integrated 5G modem. Vivo is about to present a 5G flagship in China and both Oppo and Xiaomi are ready to present 5G phones as well. Apple should not launch any iPhone 5G until next September, which will give a big advantage to the competition in the country. Counterpoint Research analyst James Yan believes Apple will use its strengths to avoid losing market share in China. It is expected that 3 million 5G phones will be sent to China this year, which will rise to 90 million next year.
“That means Apple will miss out on the first six months of the cycle [and will] rely on its strength in software and ecosystem to keep user numbers, instead of hardware.” – James Yan
Apple will also have problems in China regarding prices. The iPhone 11 starts at 5,499 yuan and the iPhone 11 Pro is priced at 8,699 yuan and above. This compares with the 3,000 yuan that Oppo and Xiaomi charge for their latest top models. Huawei’s P30 Pro, its current premium phone, will delay consumers in China by around 6,300 yuan.
In addition to innovation, prices, and 5G, Apple may also see sales influenced by a growing wave of patriotism in the country. With the ban on the US supply chain. On behalf of the Trump administration, some Chinese consumers are exchanging their iPhone for a smartphone made by Huawei or one of the other manufacturers in China. And we should emphasize that China is still the largest smartphone market in the world, which means that it is still an important region for Apple.
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