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GUANGZHOU, China – Apple’s range of iPhone 12s with 5G connectivity will be huge in China and key to achieving what analysts call a “super cycle” of upgrade.
5G refers to next-generation mobile networks that promise ultra-fast data speeds.
On Tuesday, Apple introduced four new 5G-capable iPhone models. While 5G networks are in their infancy, China’s networks have been pushing rapidly to expand coverage.
That has led to an increase in 5G smartphone sales, particularly from domestic players like Huawei.
Apple is now joining the party, a big move in a market that accounts for about 15% of the US tech giant’s total sales.
“If we look to (the) second quarter of the year, almost half of the smartphones shipped in China had 5G connectivity,” Will Wong, research manager at IDC, told CNBC. “Among the top 5 suppliers in China, Apple was the only one without a 5G model. Having 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 research firm CCS Insight.
China remains a key ingredient in Apple’s recipe for success, as we estimate that approximately 20% of iPhone updates will come from this region over the next year.
Daniel Ives
Wedbush values
The world’s second-largest economy appears to have managed to get the coronavirus under control, and there are signs of economic recovery and a revival in consumer spending.
“In the era of the pandemic, in terms of recovery, economy, and also the pandemic itself, China is ahead of other regions and countries, so it is important that Apple stay ahead and upgrade 5G connectivity,” Wong said.
Daniel Ives, an analyst at Wedbush Securities, said China’s demand is the “lynchpin of Apple’s 5G supercycle.”
“China remains a key ingredient in Apple’s recipe for success, as we estimate that approximately 20% of iPhone updates will come from this region over the next year,” Ives said in a note Tuesday.
“Up to this point, we are seeing considerable strength in the China region over the past few months (should be a source of relative strength in the September quarter) with positive trends heading into the all-important holiday period.”
Apple’s iPhone 11 series and cheaper second-generation iPhone SE have proven popular with Chinese consumers and helped the Cupertino-based company see a rebound in sales in the second quarter after a difficult first quarter.
Which iPhone will Chinese consumers buy?
In China, large screen phones are very popular. Therefore, Chinese consumers are likely to prefer iPhone 12 and iPhone 12 Pro.
Both devices feature a 6.1-inch screen, although the Pro version has a higher-spec camera and is more expensive.
The iPhone 12 Pro Max, with a 6.7-inch screen, may be too expensive for most consumers in China, Wong says.
In terms of price, the iPhone 12 starts at 6,299 yuan ($ 934), a premium of almost 17% over the US price of $ 799. Last year’s iPhone 11 was priced at 5,499 yuan and had a premium of between 10.5% and 12.5%, depending on the variant.
The iPhone 12 Pro has a starting price of 8,499 yuan ($ 1,260), a 26% premium to the US price of $ 999. The lowest model of the iPhone 12 Pro comes with 128GB internal storage. Last year’s equivalent, the iPhone 11 Pro, which started at 8,699 yuan, came with 64GB of storage. Therefore, the iPhone 12 Pro is cheaper than the initial price of the iPhone 11 at launch.
“I think 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. never, but the price might not be that attractive, “Wong said.
The analyst also noted that the iPhone 12 and iPhone 12 Pro will be available before the iPhone Mini and iPhone 12 Pro Max, saying it was a “good move.”
