In previous contributions on 5G to FierceWireless, I have looked to define the consumer uptake of 5G devices in its various stages.
The launch of the iPhone 12 in October 2020 ushered in the third stage – achieving a significant part of the smartphone market in most of the developed world.
In this article I will go through some of the details, and look at what comes next.
The initial 5G launch, focused on South Korea, started in the second quarter of 2019, and was overtaken by China in the last three months of 2019. The China surge dominated the first three quarters of last year. That saw 107 million 5G smartphone devices sold there over nine months, about a 45% market share for that time period in the biggest smartphone market in the world.
The start of the third stage saw Apple shipping 56 million iPhone 12s in the fourth quarter, according to the IDC Worldwide Quarterly Mobile Phone Tracker. That did not quite match the 63 million Android 5G phones also shipped in Q4. But they changed the situation markedly in many markets. The boost pushed 5G to half the market or more in the U.S., in Japan, and in Australia.
Android 5G dipped a bit in most of these countries in the quarter, leaving iOS as their clear driver. Only in the first and second stage countries, South Korea and China, was Android still clearly the majority of 5G devices.
Where does that leave the global pecking order?
China has not been pushed off its perch. In Q4, the 5G share of its domestic smartphone shipments went ever higher, to 69%, leaving China still the global leader on this metric.
But it is no longer the only big market. There is now a substantial potential user base in most richer countries of the world. The bias toward wealth does not come as a surprise, as the average sales price of the iPhone 12 range globally was, according to IDC data, over $1,000 before sales tax and VAT. The ASP of Android 5G devices was less than half that.
In richer markets the new iPhone 12 series was generally a half or more of total iPhone sales. In poorer countries, with lower Apple shares anyway, that proportion could be much lower.
What does this impact mean in terms of the iPhone installed base?
Shipment totals take their time to have much impact on installed base percentages. The 5G percentage among smartphones is highest in South Korea. There it is now around a quarter of smartphones in use. Then comes China, where six quarters of rising 5G volumes have pushed 5G to around one smartphone in six.
In the US it is only so far around one in 10 smartphones, as volumes have taken time to grow. A similar figure is found in Australia, while Canada and Japan are at around one in 12 smartphones. In Europe the highest percentage is around one in 20, although many countries are well below this.
Those figures do not necessarily represent connected devices. Sales of iPhone 12 models have been quite high in a few countries with no 5G connectivity at all, or only limited coverage. And there is no guarantee that those phones are set up with the right SIM cards and actually used on 5G networks where they exist.
The iPhone boost will lag
The initial impact of the Apple 5G launch will already begin to flag this year: In developed markets about 40% of sales of a new iPhone model tend to be biased toward the three months after launch.
The new iPhone lineup in the fall will be a further boost to Apple 5G, but it won't have quite the same impact in developed markets as the first time around. A lot of iPhone purchases are by the Apple faithful who regularly go for the latest iPhone, and they will trade in iPhone 12s back to operators. Some of these will end up in poorer countries after refurbishment.
In the more developed countries within a couple of years as many as four out of five iPhones sold will probably be 5G. At that level the iPhone 5G installed base will only be increasing slowly.
With the iPhone boost beginning to lag, Android 5G shipments will need to increase fast to keep some pep in the new internationalization phase.
Android 5G had a relatively weak Q4 when it was beaten down by the iPhone 12. But by the end of 2021 it should be once again the main motor for 5G smartphone adoption, with many more mid market models on offer.
Looking at the market outside China, IDC thinks Android will comfortably outsell Apple in 5G in 2021. Android will democratize the technology with lower prices for a broader global audience.
We should think now in terms of four stages in global 5G smartphone adoption. The third stage, thanks to Apple, may only figure prominently for a few quarters, like the two initial stages before it. Each stage has represented a change in scale as momentum builds. It is a bit like going up through a gearbox as the revs mount. It will be left to Android to put the 5G market into cruise.
Simon Baker is program director for mobile phones and consumer devices at IDC EMEA and a coordinator of IDC global forecasting for the 5G smartphone market. He is a long-time analyst in the mobile phone arena. Please contact him at [email protected]
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.