Apple is set to unveil the successors to its current device lineups at this year’s fall product launch on September 14. Please see below for some of TrendForce‘s latest data pertaining to the global consumer electronics market:
Although the tight supply of certain components due to complications resulting from the COVID-19 pandemic remains Apple’s primary production-related challenge, iPhone production will unlikely be drastically affected. Total iPhone production for 2021 is expected to reach 229.5 million units, a 15.6% YoY increase, with the upcoming iPhone 13 models accounting for about 37%-39% of Apple’s annual iPhone production. In addition, iPhones are also expected to account for about 77% of total annual production of 5G smartphones in 2021, making them the market leader in this segment and representing a drastic increase from 39% in 2020.
Regarding technical specifications, the Pro model of iPhone 13 is expected to include 1TB storage capacity as an optional upgrade. Other improvements over previous models include the adoption of A15 processors manufactured with TSMC’s 5nm+ process technology. All four iPhone 13 models will feature flexible AMOLED + On-cell designs for their display panels, while the Pro series will also feature a 120Hz refresh rate as well as LTPO technology for reduced power consumption. Furthermore, all four models’ primary cameras will be equipped with sensor shift image stabilization. The Pro model, in particular, will have its ultra-wide camera upgraded to a 6P lens, with the addition of autofocus capability as well. Much like the iPhone 12, LiDAR functionality is available only for the Pro model of the iPhone 13 lineup.
In view of the lackluster sales performances of the iPhone 12 mini, which reached EOL ahead of time, the iPhone 13 mini is expected to account for less than 10% of total iPhone 13 production, since Apple will focus its sales efforts on the other three models. TrendForce indicates that the global economy, markets, and personal incomes are all still experiencing the effects of the COVID-19 pandemic, which has also led to price hikes for electronic components and transportation services, thereby compounding Apple’s difficulties in setting retail prices for the new iPhone models. TrendForce expects Apple to continue the aggressive pricing strategy that it adopted for last year’s models in order to attract smartphone buyers, raise its revenue from services via increased handset sales, and make up for the aggressive prices via increased service revenue.
The iPhone 13 series, which is about to be formally announced by Apple, has already had its exterior design speculated on by various media outlets and fans alike. TrendForce’s latest investigations indicate that some of the notable hardware upgrades of the iPhone 13 pertain to the SoC (manufactured at the 5nm+ node, which enables improved performance and decreased power consumption), display, and camera. In addition, iPhone handsets featuring support for 5G mmWave will be available for sale in more countries after the release of iPhone 13.
The iPhone 13 will see a shift in its charging circuit board from the previous rigid-flex PCB design to a new design featuring SiP combined with flexible PCB. The space-saving feature of this new design will also likely result in increased battery capacity. As for retail prices, the iPhone 13 series is expected to remain similar to the iPhone 12 series assuming Apple is able to effectively control manufacturing costs, since the latest models do not come with significant hardware upgrades. As a result of this aggressive pricing scheme, iPhone shipment will likely maintain its growth trajectory for two consecutive years.
Huawei’s plight led to Apple’s rising market share in the Greater China region
Owing to heavy competition from Chinese brands, sales in the Greater China region accounted for a decreasing share of Apple’s iPhone revenue, from 19.44% in 2017 down to merely 16.33% in 2020. Nevertheless, this downtrend has been gradually reversing since 4Q20, primarily because of increased sanctions against Huawei.As Huawei was cut off from its chip supply in 4Q20, shipment of Huawei smartphones underwent a massive decline accordingly, in turn leaving vacancies in the flagship smartphone market in China. At the same time, while Apple released its new iPhone 12 models, flagship smartphone buyers in China began purchasing iPhones instead. Thanks to this shift, sales in the Greater China region began accounting for a growing share of Apple’s iPhone revenue, from 14.8% up to 19.13% in 4Q20. Since 4Q20, this figure has remained above 18% for three consecutive quarters.
Prior to being sanctioned by the US government, Huawei had enjoyed the highest market share in the high-end smartphone segment in China. After the sanctions were put into place, this segment then became highly sought after by other smartphone brands. However, because other Chinese brands had not previously placed significant emphasis on the high-end market, the iPhone was able to seize most of the market share in the high-end segment left in Huawei’s wake. Furthermore, although other Chinese smartphone brands have started developing their respective flagship models, it takes considerable time to build up their brand images in this segment and attract customers. TrendForce therefore believes that the iPhone will continue to dominate the high-end smartphone market in China for the next two to three years.
iPhones are expected to account for 16.7% of global smartphone shipment in 2021
An overview of iPhone shipments for the past few years shows that iPhone shipment went into a nosedive starting in 4Q18 because the iPhone XS/XR series featured limited improvements yet a significant price hike over its iPhone 8/X predecessor. Alarmed by this decline, Apple immediately revamped its sales strategy for the next-gen iPhone 11, which not only underwent a total overhaul in terms of specs but also experienced a price cut of US$50 for the entry-level model (the Pro model retained its previous-gen equivalent’s price). Apple subsequently released the brand-new iPhone SE in 2020, thereby reversing the downward trajectory of iPhone shipment as a result.
New iPhones saw a deferred released schedule in 2020 owing to the impact of the COVID-19 pandemic, which led to a 14% YoY decrease in iPhone shipment for 3Q20. However, as the new iPhone 12 models equipped with across-the-board hardware upgrades, including 5G functionality, were released in 4Q20, iPhone shipment saw a massive rebound during the quarter and reached a 12% YoY increase in 4Q20 and a further increase of 42% YoY in 1Q21.
Looking ahead to the shipment volumes of the new iPhone models for 2H21, TrendForce expects Apple to maintain its aggressive pricing strategy in order to boost shipment. In addition, as the iPhone 13 series will once again return to a September release, total iPhone shipment is expected to undergo a 30% YoY increase in 3Q21, but a 5% YoY decrease in 4Q21. As such, iPhone sales for 2H21 will likely surpass 2H20 figures. For 2021, iPhones are expected to account for 16.7% of all smartphone shipment, which is a step-up compared to last year.