5G phones to account for 18.9 percent of 2020 smartphone production
There is no doubt that 5G is the technology of the future. From smartphones to connected cars, 5G will power a vast array of technological innovations in the years to come. However, its adoption has been slow.
According to new data from TrendForce, things are starting to pick up. Thanks to an aggressive push from Chinese companies and the increasing availability of mid-range 5G chips, 5G smartphones may account for 18.9 percent of total production this year.
At this time last year, 5G phones were not only rare but also almost impossible to find. That isn’t the case currently. Several manufacturers have 5G devices on the market. The issue is that those devices are mostly flagship phones that cost at or around $1,000.
Such high prices are restrictive for the adoption of 5G.
Nonetheless, chipmakers like Qualcomm and MediaTek are working to expand their shares in the 5G market. As such, they are releasing new chipsets that feature 5G support for mid-range smartphones. Qualcomm’s Snapdragon 690 is a perfect example.
That, in addition to other factors, is helping drive consumers towards new 5G devices.
Notably, a large percentage of the global 5G smartphone market-as much as 75 percent-belongs to Chinese brands. The Chinese government has made an aggressive push with 5G base-station deployment to increase network coverage in the country. That, in turn, has inspired consumers to purchase more 5G devices.
As such, Chinese smartphone makers hold four of the top six spots in terms of production volume. Unsurprisingly, Huawei is number one. Given the impact of U.S. sanctions, the manufacturer has pivoted its focus to the domestic market. Huawei, which currently accounts for 31 percent of the global smartphone market share, is expected to produce 74 million 5G handsets this year.
Meanwhile, Apple is preparing for the launch of its first 5G iPhones later this year. It is expected to produce about 70 million of them in 2020, which would put it in second place behind Huawei. However, if Apple sharply increases the cost of the iPhone 12 to account for new 5G components, it could hurt its performance.
All said, an estimated 235 million 5G smartphones will be produced in 2020. That equates to 18.9 percent of the total market per TrendForce.
Mid-Tier is Catching Up
Perhaps the biggest boon to 5G adoption will be the increased availability of mid-tier devices in the next few years. The growing presence of 5G chipsets for these less-expensive devices will help drive 5G smartphone production above 500 million units in 2021 according to TrendForce.
Should that figure be met, it will account for about 40 percent of the total smartphone market.
Even so, telecom companies have a lot of work to do on the network side of things. Estimates suggest that global 5G network coverage is unlikely to surpass 50 percent before 2025. Complete coverage will take even longer.
Although the infrastructure needed for these networks has been delayed by the COVID-19 pandemic, 5G won’t truly become attractive until consumers have reliable access.
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Originally published at https://www.theburnin.com on July 23, 2020.