“5G is a unique decade an opportunity, ”Tim Cook told the media during the Q&A portion of Apple's Q3 earnings call. "And we couldn't be more excited to hit the market right then."
The truth is, the timing was a mixed bag. Apple was too late to 5G by some reports. By the time the company finally announced it would add the technology to its lineup of iPhone 12 variants, much of its competition had already beaten the company. Of course, that's not a big surprise. Apple's strategy is rarely a rush to be first.
5G networks are only now really starting to unfold. Even today, there are still many users who have to use an LTE connection by default most of the time they use their handsets. When introducing 5G on the iPhone, the main aim was to make this year's models future-proof. Consumers are sticking to phones longer, and in the three or four years before it's time for another upgrade, 5G cards will look very different.
Obviously, the new iPhone didn't hit exactly when Apple was hoping. The pandemic made sure of that. Manufacturing bottlenecks in Asia delayed the launch of the iPhone 12 by a month. This will have an impact on the bottom line of your quarterly results. The company posted a 20% year-over-year decline for the quarter. This is of tremendous importance, which will cause the company's shares to fall more than 4% in expanded trading.
Apple's diverse portfolio has helped stem some of those sales declines. While the pandemic has generally had a profound impact on consumer spending on "nonessentials", the change in where and how we work has helped drive Mac and iPad sales, which are up 28% and 46% year over year, respectively are. It wasn't enough to stop the iPhone from tripping completely, but it definitely shows the importance of having a diverse hardware portfolio.
China was a big problem for the company this time around – and the lack of a new 5G-enabled iPhone contributed significantly to that. In the greater China area (including Taiwan and Hong Kong), the company posted a 28% decline in sales. However, there are a number of reasons to hope for iPhone sales in the fourth quarter.
As I found out this morning, smartphone shipments in China were down almost consistently in the third quarter, according to new figures from Canalys. Much of this can be traced back to Huawei's ongoing problems with the US government. The company has long been the dominant manufacturer in mainland China and has been hampered by a ban on access to Android and other US-made technologies, among other things. Apple's numbers stayed relatively constant compared to the competition, and Huawei's problems could represent a big hole in the market. With 5G by its side, the next quarter could prove to be a banner year for the company.