Get ready for the 5G revolution | IDTechEx Research Article
EXTENDED VERSION - Nations and industry are preparing for the opportunities 5G investment will bring, says Dr Luyun Jiang, IDTechEx technology analyst on 5G. As featured in the 5G Report by Raconteur distributed in 'The Times'
May 23, 2019 Dr Luyun Jiang
By 2030, 5G is forecast to contribute $700 billion to the global economy with a compound annual growth rate of 20 percent. This is a revolutionary rise that will both accelerate the growth of the telecommunications industry and redefine a whole host of industrial, entertainment and IT sectors in its wake.
Its arrival is imminent. Both the United States and South Korea already having launched commercial consumer 5G networks in April 2019. Over 260,000 users in S. Korea have signed up for 5G service across 85 cities. More than half of the telecom operators, including those in China, Japan, and Europe, have sped up their 5G rollout and targeted a commercial launch within 2019 or 2020. China alone expects 5.8 percent of its GDP growth to derive directly from 5G technology by 2030.
How to benefit directly from the massive market opportunity of 5G is a key question for all business leaders and those responsible for business innovation. IDTechEx identifies 5G will bring opportunities in four aspects and hit the market at three stages.
To learn more please visit 5G Technology, Market and Forecasts 2019-2029. Source: IDTechEx Research
Imminent market opportunities: Infrastructure
The first wave of 5G investment is the deployment of 5G infrastructure. The US and South Korea spent $41 billion while the global capital expenditure on 5G was around $161 billion in 2018. With the nationwide rollout of 5G this year, the S. Korea, US, China, and Japan are likely to increase capex on 5G infrastructure. Mobile and internet operators in China has announced the plan to spend ¥34 bn on 5G in 2019. Over the next ten years, global telecom operators will invest $1.2 trillion to $1.5 trillion on 5G network rollouts, most of which will be for sub-6GHz 5G.
Companies accounting for the largest share of infrastructure investments include heavyweights such as Ericsson, Nokia, and Huawei. The largest supplier with a 28 percent global market share, Huawei, has signed more than 40 commercial 5G contracts and shipped more than 70,000 base stations already. However, future competition is still unclear as the US government increases pressure on many countries to ban Huawei from supplying equipment for 5G networks. Ericsson's CEO reportedly said that the company has won roughly 50% of the world's 5G contracts so far, while Nokia boasts more than 20 deals and launched over 100 trials with partners from Korea, Japan, US, Australia and more. Samsung has already moved to enhance its position and dominates South Korean 5G deployments with more than 53,000 base stations installed.
The massive rollout of 5G opens a new and increasing market for materials and components that are essential for 5G technologies (such as higher frequency requirements and massive MIMO). The companies that develop innovative solutions for radio frequency front-end modules (filter, power amplifier and more), active antennas, optical transceivers, optical fibers, thermal management, and small cells will benefit from the fast growth in the 5G area.
"The market for 5G will reach about $700 billion by 2029."
Coming market opportunities: user equipment
The second wave of 5G investment will comprise new 5G user equipment. By late-April 2019, there are 48 announced 5G devices from 26 vendors, many of which are 5G smartphones. These 5G smartphones will reach global markets in 2019, with a mission to rescue a declining global mobile market. Pioneers include the Samsung S10 5G, Huawei Mate X and the Motorola 5G moto mod and more from LG, Xiaomi, VIVO, OPPO and OnePlus. With the agreement to drop all litigation with Qualcomm, Apple is also likely to launch its 5G iPhone soon. The average price for a 5G smartphone in 2019 is expected to be $1000-$1500 USD, but it will drop significantly in 2020.
One key component for 5G mobiles is the 5G baseband chipset, often referred to as 5G modem or 5G chipset. Most of the first wave of 5G user equipment utilize Qualcomm Snapdragon 855 system on chip (SOC) with Snapdragon X50 modem. The newest modem Snapdragon X55 is at the sampling stage, and products using Snapdragon X55 are expected early 2020. Huawei has developed its own 5G chipset, Kirin 980 (SoC) with Balong 5000 modem, but is not offering the chipset to other companies. Similarly, Samsung has equipped some of their 5G mobiles for the S. Korea market with their Exynos 5100 but will continue to use the Qualcomm chipset for the USA. Intel has tried to enter the 5G chipset market without success. In April 2019, Intel abandoned plans to launch 5G smartphone modems after concluding there is no profit to be made from the business.
Additionally, the customer premises equipment (CPE) market is set to deliver economically viable broadband services to homes and small and medium-sized enterprises on top of their existing mobile broadband offerings. Increasingly, devices such as augmented and virtual reality glasses, 8K TVs and wearables will integrate with 5G, creating significant growth in the technology market which is expected to exceed hundreds of billions of US dollars by 2025.
To learn more please visit 5G Technology, Market and Forecasts 2019-2029. Source: IDTechEx
Dominative market opportunities: 5G services and vertical applications
The success of 5G will derive from the market opportunities it presents. 5G enables the possibility to link various wireless services to one universal cellular network. These various vertical applications will create a whole new world of technology products. The potential for a range of segment growth in support of 5G is unprecedented. Sectors including automotive (autonomous drive, in-car entertainment systems), industry 4.0 (remote-controlled robots and drones, intelligent machines), media experiences (5G TV, cloud game-streaming) and healthcare (remote diagnostics and surgery, digital health) are all set to be influenced by the 5G service boom to come.
These service sectors will contribute 60% of the revenue for 5G technology in 2030. However, it will take years for these vertical applications to adopt the technology as a search for a sustainable business model continues.
5G represents one of the largest emerging markets in the coming ten years. Equipment providers, including network equipment and user equipment, will benefit from the massive rollout of 5G networks. The demand for 5G user equipment and services from other vertical applications will become the main drivers in 7-10 years led by automotive, industrial automation, and healthcare.
To follow this industry please consult our leading report on the topic: 5G Technology, Market and Forecasts 2019-2029 (www.IDTechEx.com/5g). This report from IDTechEx Research offers a detailed analysis of the 5G infrastructure and its impact on end-user industries.
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