Apple And Qualcomm Bullish On Bright Indian 5G Future


While a debate rages on in the world’s second most populous country about the urgency or not of rolling out 5G, two global tech giants are betting big on a booming Indian 5G future, writes STAN BEER.

Unlike its neighbour China, the sub-continent is somewhat ambivalent about any impending rollout of a 5G network.

According to some pundits, it is not a question of when the Indian 5G future commences but if indeed there will be one.

Several Indian publications have posted articles questioning the necessity of building a 5G network on the sub-continent, expressing no small measure of skepticism over more high profile applications, such as emBB, driverless cars and robotic surgery.

The Indian Government itself has not addressed the issue with any urgency, with no date set for a spectrum 5G spectrum. In fact, arguments are still taking place over standards and the spectrum bands to be used.

Despite this, India is a big user of mobile technology, with about half the country’s population owning a smartphone, and thus a huge potential market for both infrastructure and handset providers.

India’s biggest mobile operator Reliance Jio has about 400 million subscribers on its 4G network, most of them prepaid.

It is against this background that we see two of the world’s biggest players in the tech market and 5G space making bullish statements about their intentions to address the Indian 5G market – even though it is presently non-existent.

According to hedge-fund Betashares, which has significant holdings in Apple stock, Apple’s new iPhone 12 combined with a recent change in India’s laws have combined to result in a potentially rewarding opportunity for the smartphone behemoth.

“Previously under Indian law, foreign retailers were banned from selling products directly unless they sourced at least 30% of their goods from India,” says Betashares operative Alistair Mills in an article penned for online publication Livewire.

However, in an attempt to generate more tax revenues for the country, India’s government has relaxed these rules and set up incentives for companies to manufacture products on the sub-continent.

As a result, in September Apple opened an online i-Store in India, the first time it has been able to sell directly to the public in that country, rather than through third party resellers.

Being a premium priced product, the iPhone has a tiny market share of 3.35 per cent in India compared to other countries, according to analyst estimates.

However, in the first quarter of 2020, prior to the release of the iPhone 12, Apple’s market share in India had already grown 71% year-on-year, in line with a growing middle class and rising average wage.

Add to all of the above the fact that with current imbroglio going on between the US and China, Apple is looking for alternative low-cost locations to make its iPhones with India being an obvious candidate.

As Betashares’ Mills points out, there is “potential for Apple to reduce manufacturing costs and taxes by looking to India as a source of manufacturing, and pass these savings on to Indian consumers, making the iPhone more competitive on a cost basis.”

However, it is not just Apple that is bullish on an Indian 5G future as a growth market for its 5G capable products.

The company that supplies Apple the key 5G components for its iPhones, as well as components for RAN equipment suppliers has also expressed positive sentiments about India as an emerging market.

Being a low cost market, most of India’s smartphone base use Android phones, and there is an increasing number of mid-range 5G smartphones available at price points that the Indian population finds affordable.

Naturally for Qualcomm, with its broad range of 5G chipset components catering for both mid-range and high-end 5G devices, is in a good position to capitalise on the Indian 5G future.

But it is not just the growth potential of devices that Qualcomm has its eye on in India. As is the case in other countries, the San Diego semiconductor giant has ambitious designs of being at the centre of an emerging 5G infrastructure market.

To that end, Qualcomm has been working with India’s two largest telecoms operators Bharti Airtel and Reliance Jio, both of whom are pressing forward with the development of 5G technologies and strategies ahead of what they see as the inevitable implementation of 5G networks in the country.

Another possible reason for Qualcomm to be bullish about an Indian 5G future is strangely the current tenuous relationship between India and China.

As a result of this, China’s market leading 5G infrastructure supplier Huawei may find itself locked out of any Indian 5G rollout.

For Qualcomm, this eliminates the problem of restrictions on the supply of its components to the eventual infrastructure providers.

Both Qualcomm and Apple have been described as contrarian for being bullish on the positive prospects of an Indian 5G future. However, many may be forgiven for thinking that the logic of this description is counter-intuitive.

After all, which other country – besides China – has a potential 5G market base of one billion plus subscribers?

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