Without 5G, Apple's new iPhone would be left behind in China | Technology

Apple Inc.'s decision to skip support for the latest wireless standard on its new iPhone could cost the company the opportunity to capture China's biggest wave of smartphone replacement in years.

The iPhone manufacturer, which is the only foreign brand that maintains a position in the top five in China, strives to fight against local competitors such as Huawei Technologies Co., Oppo and Xiaomi, whose most elegant designs, more sophisticated cameras and labels Cheaper prices attract customers from all over the country. The lack of fifth generation (5G) cell phone support in the newly announced family of the iPhone 11 will not be an immediate problem, but it could harm Apple in mid-2020, when analysts expect China's smart phone market to rapidly increase the 5G demand.

It will be "extremely difficult" for Apple to maintain its position in China in the second half of next year, says Jia Mo, an analyst at the research firm Canalys. "It remains to be seen if the iPhone 11 can offer technological innovations to compensate for some hardware disadvantages, such as the lack of 5G support."

Apple on Tuesday launched new iPhones with additional cameras, improved processors, revamped design, better batteries and faster charging; however, there was little in the company's presentation that exceeded what Android rivals have already offered. Apple suppliers saw a rebound in the price of their shares after launch, driven in part by the reduced initial price of the iPhone 11 of US $ 699.

China is in a hurry to become a leader in the 5G era, and state mobile operators have set aside billions of dollars to build the necessary national infrastructure. The new wireless standard, which offers significantly faster speeds and almost no latency, is considered key to unlocking next-generation technology applications such as autonomous driving, remote surgery and ubiquitous transmission of high-definition content. Telephone providers are naturally among the first to adopt, with the hope that faster speeds will stimulate a mobile market that has stagnated and started to decline in recent years.

Few companies have experienced a slowdown in the global demand for smartphones as severely as Apple, which stopped reporting the number of iPhone phones sold since the beginning of this year.

However, Apple's first 5G-capable phone will not be available before next year, Bloomberg News previously reported.

The main replacement cycle will begin sometime in the second quarter of 2020, as China's 5G coverage expands and suppliers offer more models, according to James Yan, an analyst at Counterpoint Research. "This means that Apple will miss the first six months of the cycle," he said. "Apple will rely on its strength at the software and ecosystem level to maintain user figures, rather than hardware."

The companies that capture this market more quickly will also be in an ideal position to meet the projected increase in demand that follows. For Apple, which now also builds an ecosystem of services and subscription, each unit sold or not sold is important because it is the gateway to another subscriber.

In addition to the technological race with aggressive Chinese rivals, Apple faces geopolitical winds against it. "The intense trade war is likely to weaken iPhone sales in China," says Mia Huang, an analyst at TrendForce. "Tariff risks and exchange rate volatility will affect iPhone prices in China."