Apple Could Lead the 5G Smartphone Market in 2020

In 2020, Apple (AAPL) is expected to march straight to the top with its 5G iPhones, according to a November 14 report by Strategy Analytics. According to the report, Apple could not only lead the 5G smartphone market in 2020, but it could also outshine Samsung—the current leader in the global 5G market. Strategy Analytics director Ken Hyers noted, “But with three new 5G models coming next year, Apple merely needs to match its current upgrade rates for newly introduced iPhone models to take the lead next year.”

However, there is a catch. Hyers is optimistic that Apple could dominate the 5G scene in 2020. However, he expects Samsung to lead again in the long run. According to Hyers, Samsung’s extensive presence in the broader smartphone market. Plus, the availability of its 5G devices across the spectrum of price points should work in its favor.

Strategy Analytics noted that alongside Apple, Huawei would also take the lead in 2020. Ville-Petteri Ukonaho, Associate Director at Strategy Analytics, noted, “With the two largest 5G markets in 2020, China and the USA, dominated by Huawei and Apple respectively, these two vendors are set to lead in 5G next year.” He added that due to the ban on its sale in the US, Huawei’s reach would be limited. However, it would continue to be a market leader in China.

iPhone 12 could be released in September 2020

While Apple hasn’t made any official about the launch of its 5G iPhones, the market has been abuzz with speculation. During its investor call last week, Qualcomm dropped a subtle hint about this topic. According to Reuters, Qualcomm CFO Akash Palkhiwala indicated “two inflection points” for 5G chips in 2020.

The report added, “One would be in the spring, when firms like Samsung and several Chinese handset makers tend to introduce new phones. ‘The second inflection point will be in the fall time frame, when another set of flagship devices will adopt 5G,’ Palkhiwala said.”

Going by Palkhiwala’s statement, we can understand that the second inflection point could be a hint about Apple. As a practice, Apple has always launched its new iPhone models during its fall event.

Apple to have its 5G modem by 2023

The iPhone 11 series, Apple’s latest launch in September, did not have 5G connectivity. However, next year, Apple plans to release iPhone 12, its highly-awaited 5G offering. These phones would feature a 5G modem from Qualcomm (QCOM).

However, reports indicate that Apple plans to launch its 5G iPhone modem by 2022. A lot of work still needs to be done on the 5G chip design, and the timeline could be extended. As a result, noted Apple analyst Ming-Chi Kuo estimated that the company’s 5G chip could be out by 2023.

iPhone 12 pricing to be in line with the market

The iPhone 11 series saw unparalleled success, especially in emerging nations due to its affordable pricing. However, this wouldn’t be the case with the iPhone 12. The 5G specs for the new range of iPhones would be more advanced, commanding a higher price.

The chip price for the 5G smartphone is likely to be 35% higher, which means Apple’s 5G iPhone may cost 30% more. However, this isn’t a matter of concern because the existing 5G smartphones from Samsung also cost more than $1,200. So, Apple’s 5G iPhone pricing is likely to be congruent with market standards. Considering Apple’s loyal customer base, they may even agree to pay a premium for it.

5G is a ray of hope for Apple

Wall Street analysts are betting heavily on the 5G iPhone launch for Apple. However, iPhone sales have become a matter of concern. As a result, the company now relies mostly on its Services and Wearables segments. However, iPhones comprise Apple’s most significant contributor to revenue and are critical to its business.

The runaway success of the iPhone 11 is a glimmer of hope for Apple. As a result, 5G iPhones in 2020 could be a crucial turning point. In a rare instance, on Thursday, Maxim analysts downgraded Apple stock to “sell” from “hold.” A gloomy outlook for iPhone sales in fiscal 2020 was the main reason for this bearish call.

However, it is noteworthy that despite the downgrade, the firm expressed optimism over the 5G iPhones in 2020. According to TheStreet, Maxim Group noted, “We see the 5G iPhone, expected to launch in September 2020, driving fiscal 2021 (through September) iPhone revenue up 4% year over year (vs. down 5% year over year for fiscal 2020 and fiscal 2022), despite our survey data indicating otherwise.”