By Lisa Chai, Senior Research Analyst, ROBO Global
Chip device makers and mobile operators all over the world agree: 2020 is poised to be a pivotal year for 5G. What’s ahead? New chips; cheaper, more integrated devices; and broader coverage for 5G networks. It’s a transition that will transform how we live, how we work, and how we engage with each other. And while nearly every industry will benefit from this rapid evolution, some of the sectors that stand to gain the most are healthcare, automotive, financial services, retail, communications and entertainment, and manufacturing and logistics—all of which are captured in the ROBO Global indices, including ROBO Global Robotics & Automation (ROBO), ROBO Global Healthcare Technology & Innovation (HTEC) and ROBO Global Artificial Intelligence (THNQ).
The speed that came with 4G changed how we engage with our smartphones in ways that we could never have imagined during the 3G era. Using 4G, we can order everything from groceries to next-day Amazon deliveries via a phone app, post our lives on social media, stream feature films, and more—anytime and (almost) anywhere. 5G promises to take our use and reliance on technology to a whole new level. The most significant advance in mobile network technology in over a decade, 5G offers faster speeds (up to 100x faster) and lower latency than today’s advanced LTE networks. And though it is already being rolled out in parts of some major cities, perhaps the most exciting thing about 5G is that we don’t yet know what it will bring. How will the technology evolve over time? How will consumers and organizations put it to work? With real-time data provided to doctors at lightning speed, will 5G finally transform the healthcare industry? What new applications will emerge—many that we can’t even imagine today? Like the Internet in the early 1990s, the future of 5G is almost anyone’s guess. What we do know is where we are today… and where we hope to be a year from now.
In the US, 5G is still in the early innings of network coverage and application. Artificial intelligence, innovations around IoT devices, and the shift to the Cloud are quickly coming together to accelerate the digitization and automation of tasks in the fields of medicine, agriculture, education, entertainment, sports, retail, and much more. This powerful combination of technologies is creating an exciting future for 5G, but the reality has not quite arrived. Based on our extensive research, it’s clear that in the handful of cities where 5G networks are in use today, reliability is spotty at best, and gigabit speeds are meaningfully lower than what the carriers had promised. In short, the technology hasn’t lived up to the hype—yet. The good news: change is afoot, and industry leaders who supply the components that enable 5G are confident that the latest advancements will bring steady growth in the reliability and reach of 5G networks throughout 2020.
Consumers and businesses alike are anxious for the shift. By the end of 2019, even the best 5G rollouts were delivering speeds just 2-10x faster than 4G technology. Industry leaders Verizon and AT&T have both stated that they expect speeds on their 5G networks to hit 10 Gbps in the next 3 to 5 years, and hopefully sooner. Achieving that goal is vital because higher speeds are a prerequisite for supporting plans to expand to more cities and introduce new mobile devices in mid-2020. Network speeds will also dictate their ability to deliver a full menu of 5G-based devices by the end of this year. At the moment, Verizon is slightly ahead of other carriers, delivering 5G services in more than 30 cities (though service remains limited to certain neighborhoods and blocks within the cities). Sprint and T-Mobile are currently launching a lower-frequency spectrum that allows for broader coverage, as well as deploying 5G in limited metropolitan areas. And AT&T, which introduced a limited version of 5G for business customers in 2019, announced that it will launch slower, low-band coverage in a few markets in 2020. Clearly, the race is on for 5G dominance.
The biggest barriers to delivering on the promise of 5G are spectrum breadth and the availability of 5G devices. The mobile-device ecosystem has been very slow to ramp up, in part because semiconductor chip prices have been too high. With smartphone price points hovering at around $1000 per device, the deployment of 5G infrastructures remains costly for the carriers. However, the introduction of Qualcomm’s 5G chips and lower-priced modems may finally make it possible for carriers to pick up the pace of 5G deployment in the US—ideally ahead of analyst expectations.
It is important to note that the delivery of 5G networks is just the starting point. Once 5G is finally in place, its reliable signals and higher bandwidth will support an almost unlimited number of devices to be connected simultaneously, many that incorporate 5G’s ultralow latency and mmWave. For consumers, that means the ability to download a 3-hour movie in the blink of an eye, use any number of 5G-enabled applications (think self-driving cars, virtual healthcare, high-graphics gaming, and more), and communicate with anyone, anywhere via a mobile device—simultaneously and with complete reliability, even in the most congested metropolitan areas.
Of course, every one of those activities begins with the smartphone, and, as is often the case, Apple has set the tone for industry innovation. Four major carriers have announced that they will offer at least a dozen or more 5G phones this year, and at least one of those devices is expected to be the Apple 5G iPhone, powered by Qualcomm. With the iPhone one of the most-used smartphones in the world, Apple’s focus on 5G is sure to set the stage for the future of 5G-enabled devices.
Wedbush analyst Dan Ives recently called 2019 the beginning phase of a “transformational 5G super cycle,” stating that, “iPhone 11 strength appears to have legs both in the US and China as installed base demand continues to look healthy into the March/June quarters with the drumroll into the highly anticipated 5G upgrade cycle in September.” His enthusiasm comes as no surprise; Apple is expected to release as many as four new iPhones in September, all of which will feature OLED displays that are the most advanced displays available in the market and, according to prominent Apple analyst Ming-Chi Kuo from TF International Securities, will support “true 5G.”
Qualcomm, the world’s biggest wireless chipmaker, recently introduced its new Snapdragon chips that should guarantee that many devices rolled out this year will support 5G in the US and China. The super-fast chip brings advancements in photo, video, gaming, and AI, and powers devices like Xiaomi and Oppo’s high-end phones that are expected to launch early this year. When paired with the X55 modem, phones should be able to download data at up to 7.5Gbps (around 8x faster than the fast broadband connection). Qualcomm’s 765 series will be cheaper than its 865 processor (thanks to an integrated chip and modem), enabling lower price points for some 5G devices. This is a plus for carriers investing in 5G infrastructures since demand for their services depends largely on their ability to offer 5G phones at attractive prices. Qualcomm has announced that it expects more than 200 million 5G smartphones will ship in 2020—a forecast that is likely to be realized thanks to its more than 350 design wins for its 5G devices in the past two quarters alone. Overall, ABI Research indicates that global sales of 5G smartphones are expected to reach around 170 million units by 2021, up from an estimated 12 million in 2019.
The push to 5G-enabled devices, combined with a constant drive toward miniaturization, has led to ever-increasing printed computer board (PCB) density and complexity. As the manufacturing process becomes more complicated, the probability of defects in smart devices with finished PCB assemblies rises. The key to success for device manufacturers is careful inspection. Companies like Koh Young Technologies, which provides 3-D inspection systems for iPhone and Samsung’s Galaxy, and National Instruments, which manufactures 5G-compliant hardware to perform conformance testing, are critical as device manufacturers of every kind expand into the 5G new era.
In late 2019, three of the largest internet providers in China—China Mobile, China Telecom, and China Unicom—each launched 5G plans to users in more than 50 Chinese cities. With more mobile internet users than any other country (China has about 800 million internet users—3x the number users in the US) and only 56% penetration nationwide, plus the largest commercial network in the world, China has a massive influence over the evolution of 5G technologies. It also presents a huge opportunity for manufacturers of all things 5G and has helped fuel the growth of companies like China’s Huawei Technologies. China’s data volumes are also accelerating rapidly, with 21 billion GB of data traffic generated in just 11 months in 2017 and mobile internet access traffic increasing 158.2% YoY. In comparison, Cisco estimates a growth of a much smaller 46% CAGR in global mobile data traffic to 2022. With analysts at Jefferies & Co. projecting more than 110 million 5G users in China by early 2020, the market opportunity in China is currently the largest in the world—and a primary market target for every technology focused on 5G.
5G is also expected to have a major impact on manufacturing efficiency by making it possible to connect millions of internet-connected devices, appliances, and sensors without draining their batteries. While much of the focus has been on 5G’s ability to support ‘smart homes’ with intelligent appliances and ‘smart cities’, smart manufacturing floors and their connected IoT devices will enable manufacturers to automate processes of all kinds. Perhaps the most overarching theme in the industrial segment is 5G’s ability to help manufacturers and IoT enablers such as PTC and Rockwell Automation cater to a new generation of worker who has spent the majority of their life with an internet-connected device in their hands. With the shortage of workers on the manufacturing floors, the emergence of 5G will help support digital transformation by unifying interfaces across various departments. One way Rockwell Automation is addressing this shift is by focusing on providing a more robust, real-time medium for collecting, analyzing, and deriving insights from the massive amounts of data streaming out of industrial machines from their client base.
While the healthcare industry is already experiencing a dramatic shift using the power of AI, 5G is the key to change for antiquated healthcare systems. As truly ‘smart’ hospitals emerge and patients gain access to remote healthcare services anytime, anywhere, the massive benefits of 5G and AI will be ubiquitous.
The power of AI is rooted in its ability to leverage large amounts of data to train its underlying algorithms. 5G is poised to facilitate this process at greater speeds than ever before, making it possible to record and transmit larger datasets across platforms than is possible using today’s 4G networks—a capability that is expected to be particularly valuable in healthcare. Using the power of 5G and AI, large files can be transmitted almost instantaneously between doctors and hospitals. This shift will enable medical data to be transmitted and consumed by doctors faster than ever before, supporting functions such as real-time diagnostics, remote monitoring, treatment adjustments, and much more.
5G is also creating a new era for telehealth, the technology that allows patients to connect virtually with their physicians via real-time video chat. Thanks to 5G’s fast speeds and low latency, telehealth providers like HTEC Index member Teladoc will be able to continue to improve the reliability and speed of their services to reach a global customer base.
2020 is the year when we will finally see many of 5G’s promises come to fruition. While consumers are sure to see myriad benefits—from faster, more reliable mobile services, to more efficient customer service everywhere from their favorite retailers to their healthcare provider—the commercial sector may, in fact, be the source of the greatest benefits. As we continue into a new year and a new decade, there is no doubt that 5G will take its place in history as one of the biggest drivers of change in our generation.
 Analyst sees ‘bull case’ of $400 for Apple, citing 5g ‘super cycle, CNBC, January 6, 2020
 Kuo: Apple to Launch Five iPhones in 2020, Including 5.4-Inch, Two 6.1-Inch, and 6.7-Inch Models With 5G, MacRumors, December 2019
 South China Morning Post, Internet World Stats
 CNNIC, 2018
 China just launched the world's largest 5G network, CNN Business, November 2019