5G phones must clear economic, technical hurdles before breaking into the mass market

by Steve Blum • , , , ,

The market for new smartphones is slowing. The global market is approaching saturation, where everyone who might use one has one, and annual sales are dropping. The pace of improvements is slowing, too. The marginal attraction of new apps and more powerful and faster hardware is diminishing.

According to a story in Digital Trends by Andy Boxall, the tide turned last year…

In 2018, smartphone sales numbers stopped growing, according to two data analysis companies, Strategy Analytics and Counterpoint Research. Strategy Analytics executive director Neil Mawston wrote in his guide to the latest figures that it’s the “first time ever in history the global smartphone market has declined on a full year basis. It is a landmark event”…

This was a five-percent drop over the 1.51 billion sold in 2017, and when you’re talking about billions of phones, a five-percent drop is relatively substantial.

That’s a problem for smartphone manufacturers, but hope is on the horizon. 5G networks need 5G-capable smartphones, and over the next five years that will be the primary driver of upgrades and new phone sales.

I don’t expect to see anything significant in 2019, and only the bleeding edge, technophile segment will be significant in 2020. What happens after that depends on how mobile carriers address two problems, one economic and one technical.

A mass market stampede toward 5G phones won’t happen until mass market 5G service is available. That build out will happen slower than mobile carriers have led city councils and county boards of supervisors to believe. And it will be far from comprehensive – the true benefits that will justify a kilobuck smartphone purchase will only be available in urban areas with high revenue potential for carriers.

The big technical question that hasn’t been answered is battery life. 5G service requires more intensive processing, which burns up energy, as do faster bit rates generally. The first units on the market won’t be optimised – can’t be until real consumers start using and abusing them in the wild – so it will be at least another year – 2021 – before manufacturers and carriers really understand power budgets. But 5G smartphones will burn through battery life faster than 4G phones, and that’s a problem yet to be solved.