The immense upheaval in the mobile internet technology has led to an unprecedented demand for speed. The estimated growth in the number of 5G smartphones and the advent of the high-speed internet has triggered a fierce competition among telcos. The ever-changing data consumption habits of users have set the stage for 5G network and that’s why the number of 5G enabled smartphones are expected to surge in the near future.
Fast mobile internet, including LTE, has left the people wanting more. Perhaps, the users won’t be satisfied for too long with average peak internet speed clocking 44.6 Mbps globally, or maybe their internet work gets more intensive! Needless to say that new technology makes the older technology obsolete. 5G is the newest wireless internet technology that phones, electronic smart devices, smartwatches and cars will be using in future. The 5G technology will be promising for both consumers and businesses. It will ensure page loads faster than before, faster downloads, unhindered live streaming and a lot more. This will have a direct impact on the smartphone shipments globally.
110 Million 5G Smartphones by 2021
Counterpoint Research has unveiled the future 5G ecosystem in its recent report. The 5G smartphone shipments are expected to grow a whopping 255%, almost reaching to 110 million units, by 2021. The 5G chips will have a higher price point which will raise the price of devices supporting it. But, 5G smartphones will be a premium only in the beginning – just like 4G devices. More importantly, only a few countries would be able to deploy the 5G infrastructure initially. The US, South Korea, Japan and China will be among the first countries to embrace 5G and deploy first 5G infrastructures. Apparently, we won’t be able to see 5G smartphones anytime before 2019.
Companies like Verizon and AT&T are already working on the technology and are likely to roll out 5G in some of the larger cities of the US. Last year, SK Telecom and Samsung Electronics Co Ltd (KRX:005930) began trials of 5G services and successfully used the network in their self-driving test site called K-City. A lot of countries would actually feel the 5G performance in 2020, including India.
In addition, the anticipation of 5G technology will slam the smartphone sales. Smartphone sales would be stagnated as manufacturers are most likely to place their bets on the latest 5G compatible devices for their future growth. The overall handset market will be down to a CAGR of 1-2% between 2018 and 2021 due to market saturation and unyielding product innovations.
The first ever YoY decline in the smartphone industry was experienced in 2017 as result of 8.5% YoY decline in the smartphone shipment in Q4 2017. According to IDC, the overall smartphone market is expected to grow at 2.8% CAGR between 2017 and 2022 as the smartphone shipment volume is expected to reach 1.68 billion in 2022. Amid the slowing demand in maturing market, manufacturers are hoping for the 5G boost.
According to Counterpoint Research, while the growth in 5G smartphones will be slow during the initial commercialization phase in 2019, sales will gradually increase once countries will start shifting from non-unified to unified 5G infrastructures.
Over the next few years, it will be a challenge and responsibility for mobile carriers to provide high-performing 5G connectivity. It is projected that by 2022, 90% of all mobile subscription will rely on mobile broadband. Though it is expected that 5G smartphones will be available in few markets in 2019, its significant demand can take some more time to before it caters to mass markets. Countries and people might prefer standalone 5G infrastructure for enhanced experience before fully committing to the transition.