appeal (NASDAQ: AAPL) delivered the results of the first quarter of fiscal 2021, which ended on December 26, 2020, thanks to the huge success of its 5G iPhone 12 series.
The smartphone giant recorded its first-ever quarter with revenue of more than $ 100 billion, as the top line rose 21% in the previous year to $ 111 billion. Apple’s iPhone revenue rose 17% in the previous year to nearly $ 66 billion.
The success of the iPhone 12 is not surprising. Apple’s attractive pricing has given its huge installed user base a good reason to upgrade. More importantly, the company can maintain its tremendous iPhone growth momentum, and it looks like it will dominate the fast-growing 5G smartphone market.
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The iPhone 12 made headlines in the 5G market
The launch of the iPhone 12 models sent Apple to the top of the 5G smartphone sales boards within weeks of launch. The devices built on their initial success and helped Apple increase its smartphone sales lead in the fourth quarter of 2020.
IDC estimates that Apple shipped 90.1 million iPhones worldwide in the fourth quarter last year, an increase of 22.2% compared to the previous year. This helped Apple reduce 23.4% of global smartphone space during the quarter, compared to 19.9% of the market it had in the previous year.
Second placed SamsungShipments grew at a much slower rate of 6.2% in the previous year. The South Korean giant ended the quarter with shipments of 73.9 million units, and its market share expanded by just 30 basis points year-on-year to 19.1%.
Counterpoint Research estimates that in the fourth quarter of 2020, 5G devices accounted for 34% of global smartphone shipments of 396 million units. This was a huge improvement over 5G smartphone shipments of just 24.1 million units in the first quarter of 2020, when Samsung entered the market with just over a third of the space under its control.
Apple thus outpaced its biggest competitor in a quarter in which sales of 5G smartphones rose. What’s more, it should come as no surprise that the iPhone maker is widening the gap in 2021.
Why Apple’s 5G Dominance Will Continue
Two specific factors help Apple conquer a nice share of the 5G smartphone market. First, the company got the price right of its new devices, with the entry-level iPhone 12 mini model starting at $ 699. The standard iPhone 12 starts at $ 799, followed by the iPhone 12 Pro at $ 999 and the Pro Max at $ 1,099 .
These price points are competitive compared to those of Samsung’s latest flagship devices. The Galaxy S21 5G starts in the US at $ 799, followed by the S21 + 5G at $ 999 and the S21 Ultra 5G at $ 1,199.
Second, Apple has a large installed base of iPhone users waiting to upgrade to a 5G device. Wedbush Securities’s Daniel Ives estimates that a third of Apple’s 1 billion billion installed iPhone base is in an upgrade window, and that could boost iPhone shipments to 250 million units in 2021. That would be a good jump over the 206 million iPhones that Apple is said to ship in 2020, according to IDC’s estimates.
Third-party research predicts that Apple could achieve 35% of the 5G smartphone market by 2021 thanks to these benefits. This will be a big deal, as sales of 5G smartphones are expected to start rising very fast this year, with Strategy Analytics predicting 150% growth from 2020 shipments of 250 million units.
Samsung, on the other hand, is expected to struggle in 2021 despite the 5G boom. The company is expected to ship only 26 million units of its Galaxy S21 devices this year, indicating that Apple may remain the best dog in the 5G smartphone space.
All in all, the iPhone maker can sustain the tremendous growth it delivered last quarter by beating its closest competitor and gaining a larger share of a burgeoning 5G smartphone market, making Apple a top 5G share that investors in their portfolios should consider.