In China, Apple’s 5G iPhone 12 sparks interest, but mixed reaction

Respondents to a poll were almost evenly split when asked if they would buy the new iPhone 12, which will give Apple users 5G access in a market where such networks are already widespread. (AFP)
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Updated 15 October 2020

In China, Apple’s 5G iPhone 12 sparks interest, but mixed reaction

  • Release of new model compatible with nation’s upgraded telecoms networks follows launches by Huawei and Xiaomi

SHANGHAI: Apple’s iPhone 12 launch drew mixed reactions in mainland China on Wednesday, with fans cheering a 5G model for their favorite brand while others planned to wait for upcoming devices from local rivals such as Huawei Technologies.

The Apple launch comes in the wake of Chinese Android-platform brands such as Huawei and Xiaomi having already rolled out higher-end 5G devices compatible with China’s upgraded telecoms networks, with the US giant seen by some analysts to be late to the party.

In its second-largest market by revenue, Apple’s announcement was feverishly discussed on social media. With more than 6 billion views, the tag “iPhone12” ranked as the no. 1 topic on China’s Twitter-like Weibo. Asked if they would buy the new iPhone, which will give Apple users 5G access in a market where such networks are already widespread, respondents to a Caijing magazine poll were almost evenly split: some 10,000 voted no, 9,269 said yes, and just over 5,400 said they were still considering it.

Available for orders in China from Oct. 16, the iPhone 12 will cost 5,499 yuan ($815.37) for a “mini” version, rising to as much as 11,899 yuan for the top of the range.

That price tag was also a hot topic, with many complaining it cost too much. “How is it this expensive even with no power charger or earbuds?,” said one commenter, referring to Apple’s announcement that it would leave out those components citing environmental reasons. Many Weibo users said they may put off ordering iPhone 12s to wait for the expected unveiling of Huawei’s rival Mate 40 Pro this month.

Still, analysts were bullish about the iPhone 12’s reception in China, saying that the firm had many loyal users who have postponed upgrading devices until the launch of the 5G-friendly iPhone 12.

With the new model in view, research firm Canalys recently revised its forecast for iPhone shipments to China in fourth-quarter 2020 to a 14 percent year-on-year increase, a big swing from the 1 percent decrease it originally predicted.

“In China now, 5G is not a premium feature, it’s a must-have feature,” said Nicole Peng, who tracks China’s smartphone sector at Canalys. Peng said the 5G launch will “trigger a new wave of phone replacements” for Apple in China before the end of the year and in first-quarter 2021.

Canalys expects 50 percent of Chinese phone owners to be using a 5G device by the end of 2020, as networks and phone brands have aggressively pushed adoption. Only 29 percent of US phone owners will be on 5G devices by the same time.

Apple could also benefit from a potential unraveling of its main high-end rival Huawei, which could see its smartphone division collapse next year due to US restrictions on its supply of chips. Neil Shah, analyst at Counterpoint Research, said he expects Apple stands to benefit “significantly” from the potential gap which will be left due to the US trade restrictions on Huawei to produce new phones at scale.

On the flipside, there is concern that Apple could be vulnerable to growing geopolitical tensions between the US and China.

Beijing is expected to unveil an “entity list” that bars domestic companies from doing business with certain foreign companies amid industry speculation that Apple and other high-profile tech firms could be targeted.

Throughout the past year though, consumer sentiment has yet to turn negative on Apple, even as Huawei’s troubles have made headlines in China.

Apple’s unit shipments in China increased 35 percent year-on-year in China in the second quarter of 2020, according to Canalys. That made it the only top brand besides Huawei to see positive growth — a feat it achieved even without offering a 5G device.


Big week for Big Tech as earnings, hearings loom

Updated 25 October 2020

Big week for Big Tech as earnings, hearings loom

  • The four giants drawing the most scrutiny — Apple, Amazon, Facebook and Google — have been wildly successful in recent years

SAN FRANCISCO: Big Tech is bracing for a tumultuous week marked by quarterly results likely to show resilience despite the pandemic, and fresh attacks from lawmakers ahead of the Nov. 3 election.

With backlash against Silicon Valley intensifying, the companies will seek to reassure investors while at the same time fend off regulators and activists who claim these firms have become too dominant and powerful.

Earnings reports are due this week from Amazon, Apple, Facebook, Microsoft, Twitter and Google-parent Alphabet, whose combined value has grown to more than $7 trillion.

They have also woven themselves into the very fabric of modern life, from how people share views and get news to shopping, working, and playing.

Robust quarterly earnings results expected from Big Tech will “highlight the outsized strength these tech behemoths are seeing” but “ultimately add fuel to the fire in the Beltway around breakup momentum,” Wedbush analyst Dan Ives said in a note to investors.

The results come amid heightened scrutiny in Washington of tech platforms and follow a landmark antitrust suit filed against Google, which could potentially lead to the breakup of the internet giant, illustrative of the “techlash” in political circles.

Meanwhile, Senate Republicans have voted to subpoena Jack Dorsey and Mark Zuckerberg, the chief executives of Twitter and Facebook respectively, as part of a stepped-up assault on social media’s handling of online political content, notably the downranking of a New York Post article purported to show embarrassing information about Democrat Joe Biden.

CEOs of Twitter, Facebook and Google are already slated to testify at a separate Senate panel on Wednesday examining the so-called Section 230 law, which offers liability protection for content posted by others on their platforms.

The four giants drawing the most scrutiny — Apple, Amazon, Facebook and Google — have been wildly successful in recent years and have weathered the economic impact of the pandemic by offering needed goods and services.

Google and Facebook dominate the lucrative online ad market, while Amazon is an e-commerce king.

Apple has come under fire for its tight grip on the App Store, just as it has made a priority of making money from selling digital content and services to the multitude of iPhone users.

The firms have stepped up lobbying, spending tens of millions this year, and made efforts to show their social contributions as part of their campaign to fend off regulation.

“For the most part, tech companies know how to do this dance,” said analyst Rob Enderle of Enderle Group.

“They don’t spend a lot of time bragging about how well they have done any more.”

Ed Yardeni of Yardeni Research said the outlook for Big Tech may not be as rosy as it appears.

“For one, regulators at home and abroad are gunning to rein in some of the largest US technology names,” Yardeni said in a research note.

Of interest to the market short-term will likely be whether backlash about what kind of content is left up and what is taken down by online titans causes advertisers to cut spending on the platforms.

Economic and social disruption from the pandemic also looms over tech firms, which benefitted early in the pandemic as people turned to the internet to work, learn, shop and socialize from home.

“Performance will be best for those providing solutions for people working at home,” analyst Enderle said.

Amazon, Google and Microsoft each have cloud computing divisions that have been increasingly powering revenue as demand climbs for software, services and storage provided as services from massive datacenters.

Amazon has seen booming sales on its platform during the pandemic, and viewing surge at its Prime streaming television service.

Enderle expressed concern that with the coronavirus disease (COVID-19) cases and a lack of new stimulus money in the US, tech companies could reveal in forecasts that they are bracing for poorer performance in the current quarter.