Although Apple’s entry into the 5G handset market will come after that of its rivals, the iPhone maker expects to make a splash next year, according to a new report by Nikkei.
Sources told the outlet that Apple has set aggressive sales targets for its premium smartphone models in 2020, with plans to ship 80 million 5G iPhones.
According to a separate Bloomberg report, the iPhone maker aims to ship 200 million handsets next year, and introduce four new models that could include both 4G and 5G devices, though plans have not been finalized.
Apple is reporting fourth quarter earnings later today, and is expected to provide a glimpse at initial sales for its iPhone 11, which was released earlier this year, and garnered a warm reception with a more modest price point of $700.
The iPhone 11 launch in September helped bolster Apple’s smartphone shipments in China in Q3, accounting for nearly 40% of its 5.1 million shipments in the country in the quarter, according to Canalys. The iPhone 11 boost helped Apple maintain its No. 5 position in China, its largest market outside the U.S., but Apple’s annual growth declined 28% in the country since last year amidst economic pressure, and as customers continue to favor domestic vendor Huawei.
“Apple is more prepared than previous ears to face strong headwinds in China,” said Shanghai-based Canalys Research Analyst Louis Lui in a statement. “Its iPhone 11 models focused on camera improvements, which proved desirable to Chinese consumers. More importantly, a lower launch price of iPhone 11 and a more flexible channel margin structure for local distribution on the new devices were critical market stimuli for Apple. But it faces a looming challenge, as Chinese vendors and operators are set to drive heavy marketing and promotions around 5G in the next two quarters. This could steal its thunder.”
The global smartphone market has been contracting as consumers continue to hold on to their devices longer before upgrading, and uncertainty around U.S.-China trade tensions loom, but the trend could start to shift.
IDC in September forecast global smartphone shipments would return to growth in 2020, boosted by a subtle ramp in 5G smartphones as average selling prices decrease and a wide range of sub-6 GHz 5G smartphones enter the market. Apple competitors Samsung and Huawei have each already introduced 5G-capable smartphones, as have other device manufacturers.
The firm expected 5G handsets to reach 8.9% of smartphones shipped in 2020, accounting for 123.5 million devices.
IDC estimated Apple’s iPhone volumes wouldn’t surpass 178 million in 2019, but noted Apple would have an edge over other vendors when it introduces a 5G iPhone next year because of a better understanding of the 5G market at launch.
Commercial 5G networks are still in their infancy in most countries, including the U.S. where service remains restricted to select parts of major cities and more widespread 5G coverage isn’t expected until 2020. Still, multiple 5G handsets are available in the U.S., like models from Samsung, LG, Motorola, and One Plus, though it appears adoption so far has been limited.