The Strategist

China launches 5G, and this is bad news for Apple

11/07/2019 - 08:39

Despite the quarterly profit unexpectedly higher than forecasts, the IT giant from the US has not been very optimistic lately. The bad news came from over the Pacific: the 5G network was launched in China on November 1.

The news of the launch of the Chinese 5G network is truly landmark for both Apple and the entire wireless communications sector. On Wednesday, October 30, the Wall Street Journal wrote that China's deputy minister of economy and information technology, Chen Zhaoxiong, announced at a conference in Beijing that China Mobile, China Unicom and China Telecom, the three main operators in China, will begin selling 5G services to consumers in 50 largest cities in the country on Friday, November 1. According to Chinese media, the service will be inexpensive - 128 yuan ($ 18) per month.

Barron’s has already reported that the United States as a whole and Apple in particular are significantly lagging behind China in the development of 5G networks. It was suggested that, thanks to 5G technology, China will dominate the wireless sector. Half of the 600 thousand 5G base stations, which are expected to begin work next year, will be located in the Eastern country.

This message is certainly bad news for Apple, mainly because the company does not yet have smartphones with 5G technology. The lack of these modern technologies will undoubtedly affect the popularity of the main product of the American company, iPhone smartphones.

The leader in 5G technologies, the Chinese IT giant Huawei Technologies, has increased its share of the smartphone market in China by the end of the third quarter to a record 42%. Huawei shipments grew in September by 66% compared to September 2018. As for Apple, its share in the Chinese smartphone market, according to Canalys, decreased by 2% and now is only 5%. Deliveries decreased more significantly compared to last year - by 28%.

Huawei already sells smartphones equipped with 5G technology. Moreover, they are cheaper than the iPhone, which does not yet have 5G. Apple engineers, of course, are working on the latest technology, but they are far behind. iPhone 5G should appear at best by the end of next year, when Huawei's dominance in the 5G sector will be overwhelming. Obviously, by the time the iPhone with 5G technology appears on the market, the number of fans of expensive American smartphones in China will decrease even more, and cheap Huawei smartphones will rise.


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