With the recent release of Apple’s 5G-capable iPhone 12 series and the release on October 22 of Huawei’s Mate 40 series smartphones, competition in the smartphone handset market is heating up in China. Even some die-hard iPhone fans are considering buying the latest Huawei smartphone amid the U.S.-China trade war and U.S. sanctions imposed on Huawei.

“The new iPhones will increase the share of high-end phones in the overall smartphone market,” said Wang Xi, Research Manager of global market consultancy IDC. IDC estimates that about 240 million 5G-enabled smartphones would be shipped this year, with the Chinese market alone accounting for more than 160 million units, or 67.7% of the total. C.K. Lu, Senior Research Director with market consulting firm Gartner, however, said that the iPhone, a latecomer to the 5G technology, still does not pack enough punch to attract Android users. Lu said 5G connectivity has already become the standard configuration for several Chinese mobile phone makers. Apple’s launch comes after companies like Huawei, Samsung, Oppo, Vivo and Xiaomi rolled out their handsets. Data from the China Academy of Information and Communications Technology showed that China’s mobile phone shipments stood at 23.33 million units in September, down 35.6% on a yearly basis. Shipments of 5G mobile phones in China amounted to 108 million units during the first nine months of this year, accounting for 47.7% of the country’s overall smartphone shipments. A total of 359 models were introduced in the market from January to September, of which 167 were 5G models.

Nicole Peng, Vice President of mobility at market research company Canalys, said the iPhone 12 will trigger a new wave of phone replacements for Apple in China before the end of the year and in the first quarter of next year. Canalys expects 50% of Chinese phone owners to be using a 5G device by the end of this year, as telecom carriers and phone brands have made tremendous efforts to push the adoption. “It is expected that by 2021, nearly 60% of the 5G smartphones in China will be cheaper than USD400, while 5G penetration in China will reach 83% in the next 12 months,” said Canalys Analyst Jin Shengtao. Global smartphone shipments decreased by 16% on a yearly basis during the second quarter of this year, according to IDC. Huawei became the biggest smartphone player in the world during the second quarter of the year, a major milestone for Chinese smartphone makers. The Chinese vendor shipped 55.8 million devices worldwide, accounting for 20% of the market share in the second quarter, while Apple shipped 37.6 million iPhones between April and June, which placed the company third with a 13.5% market share, the China Daily reports.

China has cemented its position as a global leader in 5G wireless technology and is expected to account for 70% of global 5G connections this year, according to the Global System for Mobile Communications Association. Zhao Dachun, Deputy General Manager of China Mobile, said that the firm had completed its annual construction target ahead of schedule by putting into service over 350,000 5G base stations, while Fan Yunjun, Deputy General Manager of China Unicom, said his company had joined hands with China Telecom to put into service 330,000 5G base stations. The total number of 5G base stations in China has already reached 680,000, slightly ahead of the 630,000 annual target announced by the three major telecom operators at the beginning of the year. “The country has attached unprecedented importance to the development of the digital economy, including 5G, in face of global economic uncertainties and the Covid-19 pandemic. The new 5G infrastructure will further boost the enthusiasm for 5G and increase its use in all walks of life,” said Zhao from China Mobile. A report by the China Academy of Information and Communications Technology pointed out that China’s investment in 5G will be over CNY900 billion this year. Total investments on 5G technologies will reach CNY1.5 trillion in the next five years and help create more than 3.5 million jobs. By 2030, 5G will help create a total economic output of CNY6.3 trillion, the China Daily reports.

One of China’s major smartphone makers – Xiaomi – is building a next-generation, completely unmanned automated factory that can make over 10 million smartphones every year. Lei Jun, Founder and CEO of the fourth-largest smartphone maker in the world, told China Daily that the target was set after Xiaomi’s first smart factory completed six months of operations in Yizhuang, an economic and technological development area in Beijing. Spread over an area of 18,600 square meters, the facility has an autonomous production line that can make 1 million smartphones a year. Xiaomi has been investing heavily on research and development of core frontier technologies. The Beijing-based company ended 2019 relatively well with a 27.1% growth in fourth-quarter revenue. Sales rose to CNY56.5 billion from CNY44.42 billion in the same quarter a year earlier.