Apple announced the shiny new iPhone 11 series yesterday. The new models are all set to hit the markets starting September 20, including in China. iPhones have traditionally been very popular among the Chinese in the premium segment, but things have changed in the past couple of years. Q1 2019 smartphone shipment report from China reveals that Apple’s shipments declined by a solid 30% YoY. Even in Q2 2019, the company’s shipments declined by 6% YoY.
Will the new iPhones change this trend?
While we can’t be sure whether the new iPhone 11 series will change Apple’s performance in China, what we do know is that the Cupertino giant is entering the market with a big disadvantage right from the start. At the iPhone 11 unveiling event yesterday, Apple failed to mention anything related to 5G. And considering how China has bet big on the new 5G technology, it’ll be a big drawback for the new devices.
China’s three major carriers are expected to roll out 5G in major cities by the end of 2019. There are already a handful of 5G Android phones available in the market, giving users the opportunity to connect to this high-speed network technology. But without 5G support, the new iPhones could find it hard to take on the likes of the upcoming Mate 30 Pro 5G or the Xiaomi Mi 9 Pro 5G, despite its cheaper starting price.
But Its Not Just About 5G
The ongoing trade war is yet another big issue for Apple in China. All thanks to the trade ban on Huawei, the nationalist sentiment is on the rise in China. This means a lot of people would prefer buying smartphones from companies like Huawei and OPPO instead of non-Chinese ones like an iPhone.
Also, in terms of features and experience, Android phones have come close to and even sometimes surpassed the iPhones. For example, there was a time when iPhones had no competition in the camera department. But with the recent advancements from companies like Huawei and Samsung, we have some really powerful camera flagships in the Android ecosystem.
In fact, Chinese Android phones now offer better and more advanced features than iPhones. For example, Xiaomi recently unveiled the world’s fastest wireless charging technology with 30W fast charging. Huawei’s RYYB sensor on the P30 Pro has taken its camera prowess to new heights. Then there’s Vivo experimenting with the display on its phone to make them nearly bezel-less. All the new advancements are available to Chinese customers first, at a price that’s less than the top-end iPhones.
Also, Huawei’s efforts to capture nearly 50% of the Chinese market would also adversely affect Apple’s performance in the region. The Chinese telecommunications giant has doubled its efforts to expand in the Chinese market after facing an uncertain future from the US ban. Even its new Mate 30 Pro flagship is expected to first go on sale in China. The international release could likely be delayed.
Will the Cheaper iPhone 11 Pricing Help?
Apple made a smart move by keeping the pricing of the iPhone 11 cheaper than its predecessor. But it still isn’t affordable in the Chinese market.
For example, when the P30 Pro was officially announced in China back in April, its 8GB+128GB started at 5488 Yuan in China. The base variant of the new iPhone 11 (dual-cameras) with 64GB storage starts at 5499 Yuan.
See the issue here? When the Mate 30 Pro will be officially announced in China later this month, it will be priced very close to this figure. And the phone will come with 5G support, a large battery, super-fast charging, one of the best cameras in the world, as well as a powerful AI chipset. Plus, its a Chinese smartphone, which means you support your home country when you purchase the device.
Considering these factors, Apple may not have an easy time selling its iPhones in China, at least not in the figures like it used to a few years back.
What Will Be Apple’s Counter Attack?
Daniel Ives, an analyst at WedBush states that about a third of the 900 million iPhone users across the globe are due for an upgrade in the next 12 to 18 months. Also, around 60 to 70 million Chinese consumers are due for an upgrade which could help push iPhone 11 series sales in the coming months.
Also, even if Apple doesn’t do as well as in China as it did back in its glory days, the company is still likely to profit internationally due to the ongoing trade war. With Huawei banned from using Google services on its phones, its international sales could take a hit. This opens up an opportunity for Apple to capture Huawei’s market share in the premium segment.
Also, a cheaper iPhone is reportedly in the works and is said to release next year. That could come as a respite for iOS users who are looking to upgrade to a new iPhone model but don’t want to spend a fortune buying one.