5G refers to the next generation of mobile networks that promise super-fast data speeds.
On Tuesday, Apple unveiled four new 5G-capable iPhone models. While 5G networks are still in their infancy, China’s networks are pushing quickly to expand coverage.
It has increased sales of 5G smartphones, most notably from domestic players like Huawei.
Apple is now joining the party, a major move in a market that accounts for about 15% of the total sales of the US tech giant.
“If we look at the second quarter of the year, about half of smartphones shipped in China had 5G connectivity,” IDC research manager Will Wong told CNBC. “Among the top 5 vendors in China, Apple was the only one without the 5G model. Upgrading to 5G will be very important for Apple to continue to attract Chinese market attention.”
According to market analysis firm CCS Insight, China is the world’s largest 5G smartphone market and the number one country with 5G connections.
The world’s second largest economy appears to have managed to bring coronovirus under control, and has signs of economic recovery and revival of consumer spending.
“In the epidemic era, in terms of recovery, even from economics and the epidemic itself, China is ahead of other regions and countries, so it’s important for Apple to stay ahead and upgrade 5G connectivity,” Wong said.
Danbul Securities analyst Daniel Ives said China’s demand is “the linchpin for Apple’s 5G Super Cycle.”
“China remains an important component in Apple’s recipe for success as we estimate that about 20% of the iPhone will be upgraded from the region in the coming year,” Ives said in a note on Tuesday.
“At this point we are seeing considerable strength from the China region over the past few months (should be a source of relative strength in the September quarter) with positive trends all increasing in significant holiday timeframes.”
Apple’s iPhone 11 series and the second-generation cheaper iPhone SE have proved popular with Chinese consumers and helped the Cupertino-based company see a rebound in sales in the second quarter after the first quarter.
What will Chinese consumers buy iPhone?
In China, large-screen phones are very popular. Therefore, Chinese consumers will likely favor the iPhone 12 and iPhone 12 Pro.
Both devices have a 6.1-inch display, although the Pro version has a higher specification camera and is more expensive.
Wong says that the iPhone 12 Pro Max with a 6.7-inch screen can be very expensive for most consumers in China.
In terms of price, the iPhone 12 starts at 6,299 yuan ($ 934), a premium of about 17% of the US $ 799 price tag. Last year’s iPhone 11 started at 5,499 yuan and was between 10.5% and 12.5% premium depending on the variant.
The iPhone 12 Pro starts at 8,499 yuan ($ 1,260) – a 26% premium to the US pricing of $ 999. The lowest model of the iPhone 12 Pro comes with 128GB internal storage. On par with last year, the iPhone 11 Pro, which debuted at 8,699 yuan, came with 64 GB of storage. So the iPhone 12 Pro is cheaper than its initial price when the iPhone 11 is released.
“I believe the 12 and 12 Pro will be more attractive to consumers in terms of pricing and screen size. The 12 Pro Max is attractive due to the largest screen size. But the price can never be so attractive, Wong said.
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, adding that this was a “good move”.