5G Adoption in 2021: Where Are We Now & Where Are We Going?
By: Lisa Chai, Sr. Research Analyst, ROBO Global
5G is currently being built out all around the world, working to provide a powerful broadband type of speed that we’ve never seen before. 5G is the next generation of wireless technology and represents a massive leap forward for wireless mobile communications. Its speed is close to 10 times faster than the networks we’re typically used to.
Simply put, this enhanced speed translates to the difference between downloading an HD movie in a matter of seconds versus 20 minutes. We will be able to share enormous files globally nearly instantaneously. Beyond just file sharing, 5G is the missing link that will bring the Internet of Things to life. 5G will enable everything from autonomous vehicles to smart cities to discovering the genomic sequencing of the next virus outbreak. This massive disruption is also creating a tremendous growth opportunity for investors looking to tap into the next big tech transformation.
- What makes 2021 5G's moment?
- Will 4G go away?
- How is 5G coming to our cities?
- Is 5G safe?
- Understanding edge computing and why it matters for 5G
- Investing in 5G growth & adoption
What makes this 5G’s moment? Will 4G go away?
The goal of 5G is to support massive density, improve bandwidth, and provide the lowest latency in history. It is able to support massive density and huge bandwidth improvements and provide lower latency than anything that has been developed before. This new wave of wireless communication has been under development for the last decade, proving the complexity and importance of the task at hand.
While 5G will dominate the headlines over the coming months, 4G will still dominate the global mobile landscape in terms of market share until 5G services and devices are readily available. However, the pandemic has put a spotlight on the importance of smartphones and connectivity from anywhere, driving an accelerated demand for 5G. Work-from-home culture has increased data traffic by 50% to 100%, according to Verizon. These increases were driven by Zoom meetings and streaming media entertainment as well as video games.
While the demand for data in 2020 skyrocketed, the pandemic also slowed the launch of 5G last year due to all of the unforeseeable obstacles. However, activity across 5G is showing signs of recovery, according to the GSM Association’s annual global mobile trends report. This growth is reflected by the 113 mobile carriers that have launched 5G networks across 48 countries. These carriers are expected to spend 80% or $890 billion of the telco sector’s cap ex on 5G networks over the next 5 years, projects GSMA.
Processing power is also a major driver in the 5G rollout. Many existing cellular devices don’t have built-in 5G functionality. ROBO index member Qualcomm debuted its Snapdragon 480 processor and is expected to provide low-cost 5G phones, which will propel the rapid transition to 5G in many markets around the world. As this technology continues to grow more mainstream, smart investors should consider getting in early as companies continue to fund these initiatives.
How are these companies bringing 5G to our cities, and is it safe?
Hundreds of more cell towers. These cell towers will be smaller and will tend to be shorter, consuming less power but covering greater service areas. So, we should expect to see more 5G cell towers throughout our cities, reducing dead spots for improved coverage.
There have also been conversations around the safety of these new wireless communications. The reality is simple: 5G wavelengths are entirely safe and have been tested for nearly two decades. The shorter towers mean many more devices can be connected to one cell tower at once. 5G offers network connection speeds that will be substantially higher than 4G connections, supporting frequencies of up to around 50 GHz versus the 1-3 GHz that are available today.
Understanding edge computing & why it matters for 5G
Since 5G promises low latency and the ability to connect many smart devices seamlessly, it will improve our digital experience and even provide new experiences. This is because ultrafast speeds and data transferring will be available at the edge of the network, as well as at the edge computing level. This is fueling innovation as it will accelerate computing and processing power.
Edge computing is computing that is done at or near the source of the data. Think of it as a mini cloud in a device like an iPhone, smart speaker, or smart server. Having edge computing will reduce latency and should be more secure due to the built-in security feature. By bringing processing power and cloud services closer to the customer versus being hosted at major data centers, we will be able to receive a powerful digital at-home experience. In the future, we may have personal 5G transmitters in our homes to provide direct communication with our smart devices like robotic vacuum cleaners and smart appliances. Higher-resolution video and bandwidth means better cloud gaming experiences. THNQ index member Electronic Arts could get a boost from cloud-based gaming as the pioneer in multiplayer streaming. According to ABI Research, 5G will contribute nearly $2 billion in revenue to cloud gaming by 2024.
We also anticipate 5G wireless to have a big role in enterprise technology. Augmented reality solutions by THNQ index member PTC are empowering manufacturers to achieve their digital manufacturing goals. Powered with 5G, repair technicians can digitally connect with experts from machinery manufacturers using the Vuforia augmented reality app to carry out service repairs with minimal effort.
Investing in 5G Growth & Adoption
If one thing is clear, it’s that this new generation of wireless communication stands to disrupt many existing technologies, creating better customer experiences and connectivity between devices. This massive shift serves as a substantial opportunity for those looking to invest in innovation. Due to the newness of this industry, we believe that having a diversified approach can provide investors with exposure to the rapidly evolving technology without having to pick the winners or losers. The ROBO Global Artificial Intelligence Index (ticker: THNQ) and Robotics & Automation Index (ticker: ROBO) are two ways to be introduced to the companies on the forefront of 5G and edge computing. Investing in 5G doesn’t need to be complicated. There’s tremendous transformation ahead – just ask those annoying cell service commercials.