Apple to release only 5G-enabled iPhones from next year

The company will launch a revamped version of its budget handset, iPhone SE, to attract more customers

Apple sold more than 100 million iPhone 12 series iPhones within seven months of its launch. Bloomberg

Apple will release only 5G-enabled iPhones from 2022 and plans to launch a reformed version of its low-cost handset, the iPhone SE, which will be compatible with the next-generation network to attract more budget customers, according to Japanese newspaper Nikkei.

The Cupertino-based company will stop manufacturing any new 4G models and the budget 5G iPhone SE is set to hit the market as early as the first half of next year, the newspaper reported.

Compared with its peers, Apple was late to enter the 5G race. It launched its first 5G-enabled series, the iPhone 12, only in October last year. Meanwhile, competitors Samsung, Huawei, Xiaomi and Oppo introduced 5G smartphones in 2019.

The upcoming budget iPhone SE will be powered by Apple’s own A15 processor – the same chip that will be used in this year’s iPhones – and its 5G connectivity will be enabled by Qualcomm’s X60 modem chip, Nikkei reported.

The new iPhone SE will come with a 11.9-centimetre LCD screen. Apple used only OLED (organic light-emitting diode) screens – offering improved image quality, better contrast and higher brightness – in its first 5G range, the iPhone 12 series.

Global smartphone manufacturers are trying to snag more market share through budget models as the pandemic dampens discretionary spending.

An improved cheaper offering may also help Apple to compete in the mid-range smartphone segment. It faces tough competition from rivals including Samsung and Huawei, which are equally aggressive in widening their customer base through pocket-friendly 5G handsets.

Apple launched the first iPhone SE for $400 in 2016. The cheaper iPhone posted strong sales in emerging markets such as China and India, with the company selling nearly 30 million units in 2016. But it stopped manufacturing the phone in September 2018.

Its second version was launched in April last year at nearly $420.

In comparison, the iPhone 12 Mini – the most affordable of last year’s premium iPhone range – was priced at $699. But it failed to attract many customers and Apple slashed production orders for the first half of this year.

The iPhone Mini will be replaced by a new version of the 17cm iPhone Pro Max next year, Nikkei said.

“It is pretty much decided that there won’t be a Mini next year and there will be a relatively cost-effective version of the largest iPhone Pro Max instead. However, the designs for the detailed specifications for the ... new models next year are not yet locked in,” the newspaper reported.

Apple’s net profit more than doubled in the company’s fiscal 2021 second quarter, which ended on March 27, as earnings across all categories of products reported double-digit growth. Its net profit surged 110 per cent annually to more than $23.6 billion.

Sales of iPhones climbed more than 65 per cent to $47.9bn in the quarter from the prior year period.

Apple, which shipped nearly 206 million iPhones last year, is expected to deliver 231 million devices this year and 240 million next year, according to investment bank Haitong International Securities.

“We don’t see revolutionary changes for Apple’s iPhones next year. But with more models … better product planning and specifications for next year, we do expect Apple’s iPhone shipment could at least be in line with the global smartphone phone market recovery,” Jeff Pu, an analyst at the Hong Kong-based investment bank, told Nikkei.

Smartphone shipments are forecast to reach 1.38bn units this year, up 7.7 per cent over 2020, according to International Data Corporation. This trend is expected to continue into 2022, when year-on-year growth will be 3.8 per cent and shipments will total 1.43bn.