The iPhone 12 line generated impressive sales for Apple (NASDAQ: AAPL), and the company is expected to significantly increase production in 2021 to meet the strong demand for its 5G-enabled offerings. This is not surprising, since Apple had a huge installed base of users ready to upgrade to smartphones with 5G capability – and the company gave them a great reason to make the leap with the affordable iPhone 12 line.
Perhaps more importantly, the iPhone 12 could help Apple innovate in India, an important market where it has traditionally struggled. Let’s see how.
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Fifth generation smartphones are about to take off in India
Apple has been struggling to gain substantial market share in India because of its premium price. It supposedly held only 2% of the Indian smartphone market at the end of 2019, despite registering a 41% increase in shipments during the year. The good thing is that Apple built its success in 2019 in India and is estimated to have shipped 2.5 million iPhones in 2020, making it the company’s best year in the country since 2017.
But that still doesn’t make Apple a dominant player in India, as overall smartphone shipments were 150.2 million in 2020, according to Canalys. However, 2021 could end up being a much better year for the California-based company, thanks to a sharp increase in shipments of 5G smartphones in India.
Counterpoint Research predicts that shipments of 5G smartphones from India could grow more than nine times in 2021 to 38 million units, up from about 4 million last year. Apple is in a solid position to take advantage of this huge leap.
Apple could have a good elevator
The 5G-enabled iPhone 12 mini is in one of the fastest growing smartphone segments in the country: handsets priced at $ 500 or more. With an original price of 69,900 rupees (about $ 960 at the current exchange rate), the iPhone 12 mini can be purchased for 47,900 rupees (about $ 660) at Apple’s online store in India after the exchange and other offers . This makes Apple’s phone practically on par with other entry-level 5G smartphone offerings in the country.
The OnePlus 8T 5G, for example, is sold for 42,999 rupees in India. The most expensive OnePlus 8 Pro is priced at 54,999 rupees, which puts it close to the post-trade price of the iPhone 12 at 57,900. What’s more, Apple is expected to start offering India-made iPhone 12 units starting next month, a move that could help the company substantially cut prices and make its 5G phones cheaper than rivals. after exchanges and discounts.
Demand for premium smartphones in India (i.e. those priced above $ 500) soared 91% year-over-year in the third quarter of 2020, according to IDC. Apple is one of the main players in this segment, with its share of the premium smartphone market hovering around 50% in 2020.
A closer look at the list of 5G smartphones for sale in India suggests that most devices are priced above the 30,000 rupee mark (about $ 411), except for a few basic devices. Therefore, Apple may see a significant jump in smartphone shipments in India this year if it continues to maintain its market share in the premium segment.
Meanwhile, there are rumors that Apple will put 5G connectivity on its entry-level iPhone SE this year. Supply chain gossip indicates that the next iteration of the iPhone SE could undermine the same A14 Bionic processor that powers the iPhone 12, and could launch in the second half of the year. Apple will have a better chance of conquering a bigger slice of the 5G smartphone space in India if it succeeds in launching an iPhone SE with a $ 400 5G capacity.
Overall, it wouldn’t be surprising to see Apple’s iPhone sales soar in India this year and help the company climb the market share ranking. Most importantly, Apple can gain a lot in India’s 5G smartphone market in the long run, as shipments are expected to reach 144 million units by 2025, according to a third party report – making it one of the main actions that investors can buy to take advantage of India’s nascent 5G market.