Strong momentum in the 5G market, coupled with the imminent arrival of the first compatible iPhone (opens in new tab), is making analysts more optimistic about the pace of adoption, with CCS Insight predicting there will be 3.6 billion connections by 2025.
There had been fears that Coronavirus would slowdown network builds and cause demand for new handsets to plummet. However, although there have been some short-term impacts, operators have pressed ahead with rollouts and 100 commercial 5G services are now live around the world.
Meanwhile, handsets have become more affordable more rapidly than previously anticipated and it is expected that 260 million 5G smartphones will be sold in 2020 alone.
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Stronger smartphone sales
China will account for 170 million of that figure thanks to strong support from the government and from all three major operators. More than half of all new smartphones sold in the country in the past month have been 5G compatible.
Meanwhile, a third of all mobile data traffic in South Korea is handled by 5G networks and 5G devices account for 12% of all connections.
It is true that the pandemic has had some short-term impacts on the overall mobile market as lockdown restrictions and economic pressures mean sales are either being postponed or abandoned. Worldwide sales are expected to fall 15% to 1.54 billion in 2020, but this is giving manufacturers and operators incentives to promote 5G.
“Ironically, the weak overall demand for smartphones worldwide has been one of the triggers for 5G's success", said Marina Koytcheva, vice president of forecasting at CCS Insight.
“This has sparked intense competition among manufacturers to get their 5G-enabled phones into the hands of consumers. Prices of phones featuring the latest 5G technology have slid rapidly, with devices from prominent brands already reaching £299 or €349 in Europe. We expect prices to drop further before the end of the year.”
However, demand in Europe and North America has been stifled by the absence of a 5G iPhone. Although Android manufacturers often introduce new technologies far earlier than Apple, the ability for the former to communicate and package these innovations effectively has had been a key driver of features like contactless payments. The iPhone 12, set to be unveiled later today, is widely expected to support 5G networks.
In Europe, demand for 5G has also been affected by strong 4G networks that diminish the immediate appeal of next generation networks. However, 60% of all phones sold in 2021 are expected to be 5G, meaning adoption will likely rise regardless.
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