Yesterday, Apple launched its latest product line with mobile phones: iPhone 12. Shareholders responded by sending the stock down 2.7 percent.
Many people think the new apple flagships are disappointed, but there is one big reason why Apple and the analysts are still optimistic. It is located to the east. It’s red. And is called China.
Gigamarked
The Chinese market is one of the largest in the world and virtually all sectors – both technology, film and cinema, cars and so on – depend on entering the Chinese market to succeed.
The new film adaptation of Mulan is an example of this, where significant parts of the Chinese audience have boycotted the film due to Hong Kong riots. This results in lower revenues and failed major investments.
China is expanding its 5G network in the country at record speed and are hungry for compatible phones that can take advantage of the technology. The market is gigantic. Apple needs to enter.
In the first half of 2020, as much as 50 percent of mobile phones released in China were 5G-compatible. That’s why the apple company is investing heavily in its four new 5G models – including the “world’s smallest 5G-compatible phone” iPhone 12 Mini – they have to take market share.
Large market share
Apple competitors Samsung, Huawei and OnePlus have already had 5G phones in their portfolio for a long time. Samsung S10 is considered as the first phone with 5G compatibility and was launched already in March 2019.
Many therefore believe that Apple is lagging behind, and rightly so, but with so many new models, the Silicon Valley company will be able to take large market shares.
“We estimate that 350 million iPhone devices out of a total of 950 million are in the window for renewal. This could result in a unique upgrade cycle for Apple “, writes Daniel Ives, an analyst at Wedbush Securities.
Ives believes that around one in five iPhone devices sold in 2020 will come from China, and emphasizes that Apple may end up taking a 21 percent market share in the 5G market if estimates hit.
Apple shares rise 0.2 percent in pre-trading on Wall Street.
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