5G adoption begins a slow ramp up in the U.S. in 2020

by Steve Blum • , ,

Cta 5g projections 5jan2020

Source: CTA

Mobile 5G broadband service adoption starts to grow in the U.S. in 2020, but it won’t be a breakout year. A couple of near term 5G market predictions were offered at CES in Las Vegas over the past couple of days, by the show’s organiser, the Consumer Technology Association (CTA) and by Qualcomm, which is the mobile industry’s primary chipmaker. Taken together (and at face value), the picture that emerges is of a global 5G market that 1. will launch for real over the next 12 months and 2. won’t be U.S.-centric.

Qualcomm predicts that 200 million 5G smartphones will be produced worldwide in 2020, growing to 750 million units shipped in 2022. CTA’s projections of annual smartphone shipments pegs the U.S. 5G handset total for 2019 at 1.6 million units and predicts 20.2 million 5G smartphones shipped in 2020.

Those are estimates of the pipeline, not the installed user base. Yet.

Although historical seasonal consumer electronics sales patterns have weakened, particularly for telecoms-related products, manufacturing ramp up rates still operate on a upward curve. The biggest chunk of the annual output for a new product will come in the last three or four months of the year, and it takes time for products to move from the factory loading dock to a consumer’s hands. So CTA’s shipment projections for 2019 are an indication of what the U.S. 5G user base will be by, say, mid–2020.

In very round numbers, that means less than 1% of U.S. mobile broadband subscribers will have 5G-capable smartphones in their hands by mid–2020, and less than 10% by mid–2021. For the next three years, CTA predicts that smartphone makers will be pumping out more 4G smartphones in the U.S. than 5G ones. It won’t be until 2022 that 5G overtakes 4G unit shipments, so 5G consumer smartphone upgrades won’t outstrip 4G handset upgrades until 2023.

CTA’s timeline for 5G smartphone production tracks with U.S. mobile carriers’ likely 5G deployment rate. Although carriers continue to hype their 5G build outs – and those build outs will accelerate in 2020 – widespread availability in the U.S. is still three to five years away.

It’s a different story in Asia. Qualcomm talked a lot about Chinese manufacturers at its CES press conference. Asian carriers, particularly in South Korea, are aggressively deploying 5G infrastructure. That would seem to be where the bulk of next year’s 200 million 5G smartphone shipments will go.