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Why Apple will be the undisputed king of 5G smartphones in 2021



apple (NASDAQ: AAPL) delivered blowout results for the first quarter of fiscal year 2021, ending December 26, 2020, thanks to the huge success of its 5G-enabled iPhone 12 series.

The smartphone giant ever recorded its first quarter ever with more than $ 100 billion in revenue, as the top line increased by 21% from the previous year to $ 111 billion. Apple’s iPhone revenue rose 17% year-on-year to nearly $ 66 billion.

The success of the iPhone 12 is not surprising. Apple’s attractive prices gave its huge installed user base a solid reason to upgrade. More importantly, the company can sustain its amazing iPhone growth momentum, and it seems to dominate the fast-growing 5G smartphone market.

Pieces on the chessboard with the king in front.

Image Source: Getty Images.

The iPhone 12 has made waves in the 5G market

The launch of the iPhone 12 models sent Apple to the top of the 5G smartphone’s sales chart within a few weeks of launch. The devices built on the first success and helped Apple expand its lead at the top of the smartphone sales chart in the fourth quarter of 2020.

IDC estimates that Apple shipped 90.1 million iPhones globally in the fourth quarter of last year, up 22.2% from the previous year. This helped Apple corner 23.4% of global smartphone space during the quarter, up from 19.9% ​​of the market it had in the previous year.

Second place SamsungShipments grew at a much lower rate of 6.2% compared to the previous year. The South Korean giant ended the quarter with shipments of 73.9 million units, and its market share expanded by only 30 basis points from year to year to 19.1%.

Counterpoint Research estimates that 5G devices accounted for 34% of global smartphone shipments of 396 million units in the fourth quarter of 2020. This was a huge improvement over 5G smartphone shipments of only 24.1 million units in the first quarter of 2020, when Samsung dominated the market with just over a third of the space under control.

So Apple went ahead of its biggest rival in a quarter where sales of 5G smartphones picked up speed. Also, don’t be surprised to see the iPhone maker widen the gap in 2021.

Why Apple’s 5G dominance is set to continue

Two specific factors are helping Apple gain a foothold in the 5G smartphone market. First, the company got the pricing of its new devices right, with the entry-level iPhone 12 mini model starting at $ 699. The standard iPhone 12 starts at $ 799, followed by the iPhone 12 Pro at $ 999 and the Pro Max at $ 1,099.

These price points are competitive compared to Samsung’s recently launched latest flagship devices. The Galaxy S21 5G starts at $ 799 in the US, followed by the S21 + 5G at $ 999 and the S21 Ultra 5G at $ 1,199.

Second, Apple has a huge installed base of iPhone users waiting to upgrade to a 5G device. Daniel Ives of Wedbush Securities estimates that a third of Apple’s 1 billion strong iPhone-installed base is in an upgrade window, and this could push iPhone shipments to 250 million units by 2021. This would be a nice jump over the 206 million iPhones that Apple reportedly shipped in 2020, according to IDC estimates.

Third-party research predicts that Apple can control 35% of the 5G smartphone market by 2021 thanks to these benefits. That would be a big deal, because sales of 5G smartphones are expected to take a lot of time this year, with Strategy Analytics predicting 150% growth from 2020 shipments of 250 million units.

Samsung, on the other hand, is expected to struggle in 2021 despite the 5G wave. The company is expected to ship just 26 million units of the Galaxy S21 this year, indicating that Apple may remain the best dog in the 5G smartphone space.

All in all, the iPhone maker can sustain the fantastic growth it delivered last year by beating its nearest rival and capturing a larger share of a growing 5G smartphone market, making Apple a top 5G stock that investors should consider having in their portfolios .




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