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5G won't prompt Canadians to get new iPhone 12, analyst says

Shruti Shekar
·Telecom & Tech Reporter
·3 mins read
UKRAINE - 2020/10/13: In this photo illustration a screenshot from Apple's launch promotional material of the the new iPhone12 seen displayed on a smartphone screen with the apple logo in the background. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)
GETTY

Canadians anxious for an upgrade to their existing smartphones may turn to Apple’s (AAPL) new series 12 iPhone, but analysts are unsure 5G will be the selling point.

The company unveiled the flashy phones during a virtual event on October 13. The iPhone 12 will start at $1,129 in Canada, while the iPhone 12 mini will start at $979. The company also launched a high-end version, with the iPhone 12 Pro starting at $1,399, and the iPhone Pro Max starting at $1,549.

In emailed responses, Bell, Telus, and Rogers each said customers will be able to pre-order the iPhone 12 and 12 Pro on Friday, and will be available next week. Customers wishing to get the iPhone 12 Pro Max or the 12 mini can pre-order November 6.

Hanish Bhatia, a senior analyst at Counterpoint Research, said in an interview that globally there will likely be a large pool of customers ready to upgrade, including in Canada, but that he is skeptical about 5G driving interest here.

“We have yet to see how consumers react to 5G selling points. While the [initial] 5G network is already available and some consumers might already be experiencing it, as of now even if you are in areas where you’re very close to the 5G towers, you will only experience a 10 to 15 per cent gain in speeds,” he said.

Bhatia said he doesn’t think 5G will be the reason Canadians upgrade, but if they do they’ll likely still keep the phone for three to four years, which will be enough time for a more mature 5G network to catch up in Canada.

Bhatia added that because Canada’s operators have made investments towards being 5G ready, they will focus on getting Canadians to upgrade during Black Friday and Boxing Day.

“We are already seeing the operators in Canada trying to sell their 20 GB plans, the hierarchical plans, so because they’ve invested so much in 5G infrastructure, they’ll be looking at devices to monetize that 5G network,” he said.

Apple does not break down how many users it has in Canada, but according to StatCounter, the tech giant in September 2020 captured 50.8 per cent of Canada’s market share. In Q2 2020, Bhatia said Apple saw a 24 per cent year-over-year decline in handset sales in Canada, mostly because of the impact of COVID-19. Despite the decline, he said Apple will likely see a strong Q4.

Gene Munster, an analyst at Loup Ventures, said in a note that globally Apple will still be able to promote 5G advantages even though 5G networks are not mature.

“While we believe it will take carriers years to build a compelling 5G infrastructure, Apple is ready today with a lineup of phones that should enjoy a three-year upgrade cycle, compared to a typical one-year duration,” he wrote.

Munster added that 2021 will be a big year for Apple because there will be a huge market of users ready to upgrade their phones.

He indicated in a note that of the one billion active iPhone users globally, about 420 million users are expected to upgrade.

Duncan Stewart, director of technology, media and telecommunications research at Deloitte, said that the global pandemic has created “pent up demand” for smartphone sales and expects 2021 to have higher sales than 2019.

However, despite the expectation, there is still uncertainty around COVID-19, Stewart said, adding that if a third-wave happens in early 2021, it might affect users considering an upgrade.

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