By Dan Strumpf
Apple Inc. is playing catch-up in China with the launch of its
first 5G-enabled iPhones, seeking to supercharge uneven sales in
the company's second-biggest market -- where homegrown rivals
Apple's first 5G-enabled handset is a late entry in China, where
local brands have long offered a suite of 5G-ready gadgets to use
on the nation's up-and-running next generation networks. It
launched as China's economy is rebounding faster than the rest of
the world after it contained the coronavirus pandemic, but also at
a time of increasing technology nationalism among some Chinese
consumers amid heightened trade tensions with the U.S.
A crucial battle for Apple is in the premium smartphone market
Apple once ruled before losing ground to Huawei Technologies Co. in
On Tuesday Apple unveiled four versions of the iPhone 12 capable
of connecting to ultrafast 5G networks. The new devices offer a
retro design and prices roughly in line with last year's iPhone 11,
though a smaller 5.4-inch iPhone 12 Mini starts at $699 in the
At an Apple store in downtown Shanghai on Wednesday, the new
iPhone wasn't yet on display nor were any promotional posters, two
days before the new device was available for preorder.
Still, some Chinese consumers said they were excited about
Apple's first 5G handset, and said they didn't expect the trade
tensions between Washington and Beijing to sway their purchase
"I think the overall upgrade on image and video function is
quite significant this time," said Zhefan Shen, a 27-year-old who
works for an internet company in Shanghai and has recently used
Chinese-brand phones. After watching the iPhone launch event, he
said he plans to buy the iPhone 12 Mini. "I am a firm fan of small
screens," he said.
The flip side of Apple's wait to enter the 5G-handset market is
pent-up demand among committed iPhone fans in the country, analysts
say. Wedbush Securities estimates about 20% of iPhone upgrades will
come from China over the next year.
"We'll definitely see a boost" in iPhone sales following the
launch, said Duncan Clark, chairman of investment adviser BDA
Homegrown rivals have been chipping away at Apple's market share
in China for years, though the launch of its second-generation
iPhone SE gave shipments a 14.1% lift during the first half of the
year, according to market tracker Canalys, as the broader
smartphone market in China contracted.
Apple's revenue in its Greater China region fell 3.1% in the
first half of the year to $18.8 billion, while its overall revenue
rose 5.5% in the same period.
A worrisome trend for Apple is its shrinking share of China's
market for high-end handsets. In 2017, Apple dominated the premium
$600-and-up smartphone market with an 86% share, versus Huawei's
5%, according to Canalys. But in the first half of 2020, Huawei
controlled almost half the market, while Apple had fallen to
"In China's premium market, there are only two vendors: Apple
and Huawei, " said Mo Jia, an analyst at Canalys.
Huawei is set to launch its latest flagship device, the Mate 40,
later this month, likely further juicing sales in the short term,
though the effect could fade as U.S. tech restrictions bite.
Apple faces a challenge in the deepening trade tensions between
the U.S. and China. Washington has added dozens of Chinese
companies, including Huawei, to its export blacklist. More
recently, the Trump administration has cracked down on popular
Chinese apps, including Tencent Holdings Ltd.'s WeChat and
ByteDance Ltd.'s TikTok. Beijing is threatening to release its own
"unreliable entity" list to punish U.S. tech firms in response.
Allegra Li, a 28-year-old freelance translator and a loyal Apple
fan in the central city of Changsha, said many of her friends have
switched to Huawei phones amid the tensions.
"Although some of them liked Apple very much before, they now
try to use Huawei as much as possible," she said.
For Mr. Shen, the tech skirmish between the two countries is
"As an ordinary consumer, even if I buy one less Apple device,
this will not have any impact on the bigger picture," he said. "I
just want to use a product happily."
Apple's roots in China, however, run deep. It relies heavily on
China's huge electronics factories to churn out iPhones and other
gadgets. Apple curates its app store in China to stay on Beijing's
good side, a practice that has riled some free-speech activists but
that analysts said have helped it survive in a country from which
other U.S. tech giants have retreated.
"It's such a resistant company to geopolitical shifts," Mr.
Clark of BDA China said concerning Apple. "If they come down, or
they are taken down [in China], then it's a sign that U.S.-China
relations have really broken down."
Apple continues to have a stable of loyal fans in China who will
reliably flock to the new iPhone now that it is 5G enabled and
comes at an accessible price point, said Neil Shah, analyst at
"Except for Apple, everyone has" a 5G phone on the market, Mr.
Shah said. "Now that it has 5G capability, that will work heavily
in Apple's favor."
Lekai Liu contributed to this article.
Write to Dan Strumpf at firstname.lastname@example.org
(END) Dow Jones Newswires
October 14, 2020 09:24 ET (13:24 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
から 11 2020 まで 12 2020
から 12 2019 まで 12 2020