Will 5G Handsets Make Their Way Into The Market By 2020?

According to a recent report by research firm Strategy Analytics, it is expected that 5G mobile handsets will be available for sale in the market by 2020, following a broader rollout of the technology. Though the first trial handsets are expected in 2018, they are likely to suffer from problems such as a short battery life, no 4G handover or unstable connectivity. However, these problems will be taken care of before its actual launch in 2020. The first commercial 5G handsets will likely be highly expensive.

Major U.S. telecom behemoths – Verizon Communications Inc. (NYSE:VZ) , Sprint Corp. (NYSE:S) , T-Mobile US (NYSE:T) and AT&T Inc. (NYSE:T) – are all moving ahead with their 5G plans and aim to launch their 5G networks in the upcoming years. They have either tested or are in the process of testing 5G technology. However, Verizon seems to have the lead as evident from its plans to initially deploy 5G wireless networks in 2017.

What is 5G?

It is the next major phase of mobile telecommunications standards after the 4G/IMT standards. According to Next Generation Mobile Networks Alliance, 5G networks allow data rates of tens of megabits per second for millions of users, 1 Gb per second simultaneously to people on the same office floor, increased spectral efficiency compared to improved 4G coverage, greater signaling efficiency, and lower latency compared to LTE.

Availability

The commercial 5G handsets for 2020 will be first made available in South Korea and Japan. The next round of launch will be in the U.S., the UK, Sweden and the UAE in 2021 with tens of millions of 5G handsets to be sold by 2022. By 2025, the sales figure is expected to exceed 300 million. China’s 2020 5G plans seems to be in line with the U.S., South Korea and Japan who are moving forward with their new plans to meet broadband access demands. On the other hand, European operators are more focused on Internet of Things (IoT).

5G Technology Specifications

Several analysts opine that 5G connections will reach 690 million by 2025 in relation to “user-linked subscriptions” and not industrial machine-to-machine connections. Connections which possess an individual user end-point, either Business-to-Customer (B2C) or Business-to-Business (B2B) such as consumer electronics products will be preferred. The figure takes into account connections for handsets, modem, embedded connections in personal computers, notebooks, laptops and tablets and connections in the consumer electronics category including consumer wearables, connected cars, e-book readers, portable games consoles and media players, digital cameras and navigation devices. Machine-to-Machine (M2M) or IoT connections related to vertical/industrial applications which do not have an individual end-user will be excluded.

Advantages of 5G

A 5G network will provide download speed of 1 Gbps (gigabit per second), which is 200 times the throughput of the currently available standard 4G LTE network. The latency period of data delivery will be in single milliseconds. Additionally, 5G technology is designed to be more power efficient than any other standard wireless networks available at the moment. Therefore, 5G-enabled mobile devices are likely to last much longer than their 3G or 4G counterparts.

Additionally, superfast 5G mobile networks will be necessary to manage the exponential growth of Internet-connected devices, popularly known as Internet of Things (IoT). According to a recent report by research firm International Data Corporation (IDC), worldwide spending on IoT is slated to grow at a 17% compound annual growth rate to nearly $1.3 trillion in 2019 from $698.6 billion in 2015.

2016’s 5G Strategic Partnerships

Verizon recently signed a Memorandum of Understanding (MoU) with SK Telecom Co. Ltd. (NYSE:S) to merge their 5G technical specifications on a global basis. Nokia (HE:NOKIA) Corporation (NYSE:NOK) is also working on its 5G expansion plans and has signed a research collaboration agreement with BT Group plc (NYSE:T) where both the companies aim to work toward developing 5G technologies, creating 5G Proof of Concept (PoC) trials and developing technology standards and equipment. Such collaborations will include a number of joint studies and researches, which will further be utilized for the development of 5G.

The Bottom Line

5G marks a revolution in the field of communications and is leading to a number of strategic alliances. It is expected that such alliances will lead to higher adoption of the technology going forward.




NOKIA CP-ADR A (NOK): Free Stock Analysis Report

AT&T INC (T): Free Stock Analysis Report

SPRINT CORP (S): Free Stock Analysis Report

BT GRP PLC-ADR (BT): Free Stock Analysis Report

VERIZON COMM (VZ): Free Stock Analysis Report

SK TELECOM CO (SKM): Free Stock Analysis Report

T-MOBILE US INC (TMUS): Free Stock Analysis Report

Original post

Zacks Investment Research