The first 5G capable smart phones are beginning the hit the market, and already there’s wailing about sticker shock – a Samsung Galaxy Note 10 Plus 5G will cost $1,300 and only be available through Verizon, at least for the next few months. That’s a lot of money for an Android phone (although not exactly nosebleed territory for iOS fans). But it doesn’t say much about what it’s going to cost the average consumer to upgrade to 5G, by the time the average consumer can find 5G service.
The initial price of 5G phones isn’t indicative of anything except manufacturers starting at the top of the marginal price curve and getting ready for a quick downhill run. As manufacturing ramps up, and product bugs are squashed, the price will come down.
The first target market is technophiles – people who will buy it because it’s new tech. That’s probably a six-figure market in the U.S. They’ll pay the most. Second target market is early adopters – people who perceive a significant benefit from the increased performance 5G phones presumably will offer. That market is probably in the seven figure range. By the time 5G phones break out into the general market – eight and nine figures – price points will be in familiar, 4G territory.
Hardware and service adoption will follow service availability, and that will be the limiting factor for 5G uptake over the next two to three years. There’s very little 5G service available right now, and commercial-scale deployments won’t begin until next year. What we’re seeing from carriers now are pilot projects aimed at preparing for the buildout that’ll begin in 2020 and continue for the next five to ten years.
There’s no need for manufacturers to rush into 5G production or push down phone prices in the coming year. They’re wisely positioning themselves for the long haul.
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.
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.
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.
It’s a lot like spring training. Mobile 5G service is moving into the “proof of concept” stage, according to a joint press release from Samsung and Verizon. They trotted out a design they intend to offer to consumers “in the first half of 2019” at a Qualcomm meeting this week.
Both Verizon and AT&T plan to light up very limited 5G (or in Verizon’s case, near–5G) networks in several U.S. cities by the end of the month. Those, too, will be demonstration and testing platforms, rather than full-on, consumer facing service. And it’ll be fixed – not mobile – service, delivered to people in homes and businesses via WiFi “pucks” (as AT&T describes them).
Those are workouts, not regular season games, and they’re necessary. It’s one thing to develop standards and design new systems, it’s quite another to deploy them in the wild. Paying customers will evaluate the service based on their expectations, not on design specs. Cell sites will go where terrain, access and capital budgets allow. Smartphones – the critical link in the system – have to fulfil those expectations while working within network constraints.
It’s no surprise that Apple plans to sit out this next round in the 5G deployment saga. According to a story in Bloomberg, the company is sticking to its playbook and waiting for the dust to settle before adopting the new standard…
As with 3G and 4G, the two previous generations of mobile technology, Apple will wait as long as a year after the initial deployment of the new networks before its main product gets the capability to access them, said the people, who asked not to be identified discussing the company’s plans.
Apple’s previous calculations – proven correct – were that the new networks and the first versions of rival smartphones would come with problems such as spotty coverage, making consumers less compelled to immediately make the jump.
With its 5G smartphone still just a proof of concept product, Samsung is unlikely to get enough into the market next year to make much of a dent in demand, but it will earn a place in the spotlight for being first. We won’t see 5G service deployed to a meaningful degree in 2019 but, like Cactus League baseball, it’ll still be a lot of fun to watch.
Home automation, powered by cloud-based artificial intelligence, is now a mainstream product category, taking center stage at the major consumer electronics companies’ booths at CES. The huge 4K and 8K screens that dominated Samsung’s display the past few years were stuck in a back corner, while the main aisles were lined with home appliances with voice recognition systems and driven by artificial intelligence.
LG led its press conference with artificial intelligence, via both its in-house platform and Google Assistant. Its flag bearer is CLOi, a smart speaker shaped like a cute little robot with expressive eyes that’s “capable of physical and emotional interaction”, according to marketing VP David VanderWaal.
Yes. It is.
He asked “what’s for dinner”? CLOi just blinked and stared at him. “CLOi, are you talking to me yet? What recipes can I make with chicken?” More blinks and stares. Instead of a virtual June Cleaver, VanderWaal was dancing with Peg Bundy. Sorry guys, AI won’t be a wormhole back to the 50s.
In-house AI platforms might still be a work in progress, but Google Assistant and Amazon Alexa are ready for prime time and are also included in products from major manufacturers. When VanderWaal invoked Google Assistant during his demo, it responded flawlessly.
There was no shortage of third-party home automation hubs on display, many of them claiming AI capabilities and universal compatibility, but the prospects for most are fading. The one bright spot remains vertical markets, such as home security or commercial properties, where professional installation and support makes economic sense.
Consumers don’t want to wrestle with the things they buy – it’s a lot easier to flip a light switch than it is to wrestle with a Z-wave network or hack at automation scripts. When you speak a command and it just works though, it’s a mainstream product.
Apple and Samsung are in a dead heat in the U.S. Both companies captured 35% of smartphone sales for three months ending in August of this year, according to Kantar Wordpanel, a market research firm based in London. Apple is showing strength in carrier distribution channels, particularly with Verizon…
“Apple maintained strong momentum in the US one month before the release of iPhone 8 and iPhone 8 Plus, and grew its sales share by 3.7 percentage points year-on-year, compared to Samsung’s growth of 0.8 percentage points,” [Dominic Sunnebo, Global Business Unit Director at Kantar Worldpanel said]. “Weaker sales through Verizon hurt Samsung as Apple approached a 50% share within the largest US carrier – an even higher proportion than at AT&T, a traditional iPhone stronghold.”
Kantar bases its market share estimates on operating system sales data. Overall, Android has a commanding lead, with 63% of the U.S. market. But Apple is gaining ground. Its 35% share of operating system sales is up 4% from the same period a year ago, while Android’s share has dropped 3%.
In China, the world’s biggest smart phone market, Apple’s iOS gained 4% year over year, climbing to 18% market share, while Android dropped 4% to 82% – still a commanding lead. Windows is at a big fat zero percent in China, which is the principal reason its worldwide share crashed to virtually nothing, according to some estimates.
Huawei is the leading manufacturer in China, with 31% of smartphone sales. BBK Electronics, which sells under the Oppo and Vivo brands, is second with 20% and Apple is third. “The flagship iPhone 7 and iPhone 7 Plus were the two top-selling models in urban China during the period”, according to Kantar’s press release.
Apple edged out Samsung for most highly rated manufacturer, scoring 81 points, a gain of one. Samsung wasn’t far behind, getting an 80, which was unchanged from 2015. Satisfaction fell off sharply after that, though, with Motorola/Lenovo in third place with 77, HTC in fourth with 75, and LG and Microsoft/Nokia tying for fifth at 74. “All others” got 73 out of 100.
When individual models are rated, it’s Samsung that comes out on top. Its Galaxy Note5 scored an 86, with Apple’s iPhone 6s Plus close behind at 85. HTC’s Desire and LG’s Leon LTE were at the bottom of the list, both receiving a rating of 67.
Mobile carriers don’t do as good a job satisfying U.S. subscribers as the manufacturers. The industry overall rated a satisfaction score of 71 out of 100, as did AT&T and Verizon. Sprint was at the bottom with 70 and T-Mobile did the best of the big four with a 74. Subscribers like both the brick and mortar and web store experience offered by the carriers, as well as network coverage and call clarity. The highest level of dissatisfaction was with call centers, service plan choices and mobile broadband speeds and reliability.
Tizen is an open source project that’s largely driven by Samsung. It started out as an alternative to Android and a replacement for Bada, Samsung’s previous in-house OS. So far, it hasn’t found much traction in the mobile phone market, despite Samsung’s dominance of that sector. A couple of Samsung smart phones with Tizen installed shipped to India, but so far haven’t done very well.
On the other hand, Samsung is installing Tizen on its Gear smart watch, as well as smart TVs and other consumer electronics products that are less dependent on the good will of independent app developers. The 3.0 upgrade is pitched as “IoT ready”, according to an article in PC World with support for “refrigerators, light bulbs, washing machines, and even vacuum cleaners”. It could evolve into the OS of choice for connected devices, which are more or less self-contained and don’t need third party apps or services.
So long as it has a sugar daddy with deep pockets and a clear business case, the Tizen project will push ahead and its adoption rate will continue to grow, even if it’s just within the Samsung universe.
Virtual reality is ready for a break out into the mass market, but augmented reality is not offering a compelling product to consumers yet. It was hard to find a gee-whiz proposition while wandering through the Las Vegas Convention Center today at CES, or indeed much of anything that was significantly different from last year. Except for the virtual reality headsets and the long lines of (mostly) guys waiting for their turn to try one out.
The Consumer Technology Association – the rebranded host of CES – is predicting that virtual reality will be a $540 million product category this year, with 1.2 million units sold.
I tried Samsung’s Gear VR demo, which involved a $99 headset adaptor that turned one of their top end mobile phones into a VR player. It was fun surfing in Tahiti for a couple of minutes. If you already have a new Galaxy 6, it’s a no brainer add on. It’ll run Occulus games and interactive content, such as a day hanging out with LeBron James, that Samsung is producing. As far as I know, it’s the first time that Samsung has dipped a toe in the content creation world.
Augmented reality, on the other hand, was a non-starter. The prevalent application was previewing home improvements and decorating options. I didn’t see any applications or consumer-friendly products that would appeal to a mass audience.
The highlight of the day was stumbling on a live celebrity interview with Edward Snowden, the fugitive nemesis of the National Security Agency, via a Suitabletech telepresence robot. Peter Diamondus, of X-Prize and Singularity fame, had a friendly and fascinating conversation with him. More on that tomorrow.
California does better than that with 26% of Internet connections on the Akamai content delivery network measuring 15 Mbps or faster, which would put us at 14th internationally, with about the same adoption rate as Finland and the Czech Republic. As with Internet speeds, South Korea, Hong Kong and Japan rank first, second and third respectively.
South Korea is particularly strong when it comes to 4K capable homes, more than half – 53% – clear the 15 Mbps benchmark. That gives South Korean manufacturers in general and Samsung in particular a big competitive advantage. The ability to field test new products in the home market, where high speed broadband adoption is robust enough to support significant content production as well, will boost development of the technology.
The U.S. and Californian figures are encouraging, but might also be misleading as well. The more people that buy service packages at or above the 15 Mbps level, and the more they start streaming high bandwidth 4K programming, the more clogged local and long haul infrastructure will become. It’s one thing for a relatively small fraction of users to occasionally hit high speeds. If that becomes the norm for streaming traffic, though, core infrastructure, from the neighborhood level on up through connections at Tier 1 Internet exchanges will have to be upgraded to handle the volume and avoid complete logjams.
Tizen requires less processing power and memory, thereby ensuring faster device speeds while consuming less energy…
Because it is lightweight, Tizen is optimal for use across a wide spectrum of smart connected devices in the IoT space. While devices with high demand for computing power, such as smartphones and TVs, are part of the IoT, so are devices that require relatively less computing power, such as wearables, vacuum cleaners and washing machines.
Samsung isn’t giving up on Tizen for heavier applications. It’s still the OS of choice for its smart TVs and it’s launched a Tizen-based smartphone in India, albeit to a lukewarm reception.
But clearly Samsung is looking at a development fork: a smart, processor-intensive version that might or might not find a useful place amongst the other descendants of Unix, versus a strategy of optimising it for the stripped down requirements of the moderately bright devices that are likely to comprise the vast majority of IoT nodes.
That’s in keeping with the promise that Samsung CEO BK Yoon made at CES last month, saying “our IoT components and devices will be open. The Internet of Things needs an open ecosystem”. Where Android is a creature of Google, the Tizen project runs under the flag of the Linux Foundation. Samsung and Intel are first among presumed equals in managing the project, but given the foundation’s governance structure that needn’t always be so.
One of the key reasons smart phones took off was the fact that purpose-built operating systems were developed. Whether or not it’s Tizen, an open source, community-managed device OS that’s optimised for lightweight IoT needs and directly integrated with the security, control and networking operating systems that’ll tie them together is the best way forward.