5G Device Prices Limit Adoption in Short Term but top Vendors face disruption.
5G Smartphones from #Samsung, #Huawei will be $1000+. Subsidies must return.
Tweet thisBOSTON--(BUSINESS WIRE)--5G smartphones will carry wholesale costs of more than $750 when they are introduced in 2019, translating to retail prices of as much as $1,000 or more. According to a series of newly published reports from the Strategy Analytics Device Technologies practice, 5G device prices will decline at a much slower pace compared to 3G and 4G handsets. Subsidies will be necessary to make 5G smartphones affordable to the mass market.
The report 5G’s Dirty Little Secret: Subsidies Must Return (available to clients here) concludes:
Senior Analyst Ville-Petteri Ukonaho commented “5G has many more risks than rewards for most vendors in the short term. We believe caution about the speed of 5G ramp up and slope of the price/performance curve for devices is critical. Unlike current generation smartphones, 5G devices will require a number of changes in order to provide the best performance, including new chipsets and additional antennas. 5G devices will be the most complex and expensive ever.”
Ken Hyers, Director of Emerging Device Technologies agrees “It requires magical thinking to expect that consumers are going to rush to buy 5G smartphones that are bigger, and more expensive than any phone that they’ve ever bought before. Only 9% of Chinese customers, for example, buy phones whose wholesale prices start at US$500 and up. Without scale from China to drive device prices lower, can 5G forecasts from operators and device vendors really live up to their lofty ambitions? Slower uptake is a real threat unless someone closes the gap to 4G performance.”
David Kerr, SVP adds “The history of the mobile industry teaches us that with every transition from one wireless generation to the next at least one top vendor has found itself wrong-footed by the transition and has seen its market share collapse (i.e. Motorola and Nokia). Could Huawei be the next? Or will Samsung’s lack of presence in China see it vulnerable?”
Additional insights on the 5G market available include:
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