GUANGZHOU, CHINA – The iPhone 12 lineup with 5G connectivity will be very important in China and key to achieving what analysts call a “supercycle” upgrade.
5G refers to next-generation mobile networks that promise ultra-fast data speeds.
On Tuesday, Apple unveiled four new iPhone models with 5G technology. While 5G networks are in their infancy, China’s networks have been rapidly pushing to expand coverage.
This has led to an increase in sales of 5G smartphones, especially from domestic players like Huawei.
Apple is now joining the party, which is a big step up in a market that accounts for around 15% of the US tech giant’s total sales.
“If we look at the (second quarter) of the year, nearly half of the smartphones shipped in China have 5G connectivity,” IDC Research Director Will Wong told CNBC. “Among the top 5 sellers in China, Apple is the only one that does not own the 5G model. Getting a 5G upgrade will be very important for Apple to continue to attract the attention of the Chinese market.”
China is the world’s largest 5G smartphone market and the country with the most 5G connections, according to market analysis firm CCS Insight.
“In the era of the pandemic, in terms of recovery, the economy, and also from the epidemic itself, China is outperforming other regions and countries, so it is important for Apple to stay ahead and upgrade 5G connectivity,” Wong said.
Daniel Ives, an analyst at Wedbush Securities, said Chinese demand is “the cornerstone of Apple’s 5G super cycle”.
Ives said in a note on Tuesday: “China remains a key component of Apple’s recipe for success, as we estimate that approximately 20% of iPhone upgrades will come from this region over the next year.”
“Up to this point, we are seeing significant strength from the China region over the past few months (should be a source of relative strength in the September quarter) with positive trends heading towards the very important holiday time frame.”
Apple’s iPhone 11 series and cheaper 2nd generation iPhone SE proved popular with Chinese consumers and helped the Cupertino-based company We see a pickup in sales in the second quarter After a difficult first quarter.
In China, large screen phones are very popular. Therefore, Chinese consumers are likely to prefer the iPhone 12 and iPhone 12 Pro.
Both devices feature 6.1-inch screens although the Pro version has a higher spec and more expensive camera.
Wong says the iPhone 12 Pro Max, with a 6.7-inch screen, might be too expensive for most consumers in China.
In terms of price, the iPhone 12 starts at 6,299 yuan ($ 934), which is roughly 17% on top of the $ 799 US price. IPhone 11 launched last year at 5,499 yuan and was charging between 10.5% and 12.5% premium, depending on the variant.
IPhone 12 Pro starts at 8,499 yuan ($ 1,260) – a 26% premium over the $ 999 US pricing. The iPhone 12 Pro’s lowest model comes with 128GB of internal storage. The equivalent of last year, iPhone 11 Pro, which started at 8,699 yuan, came with 64GB of storage. So the iPhone 12 Pro is cheaper than the iPhone 11 starting price at release.
“I think that the 12 and 12 Pro in terms of price and screen size will be more attractive to consumers. The 12 Pro Max is attractive due to the larger screen size. As ever, but the price may not be that attractive, ”said Wong.
The analyst also noted that the iPhone 12 and iPhone 12 Pro will be available sooner than the iPhone Mini and iPhone 12 Pro Max, and said it was a “good step”.