October 8, 2020 | technology | No Comments
As the only successor to the 4G cellular technology used in smartphones and mobile computers, 5G was guaranteed to be a hit at some point — the only real question was how long it would take to truly go mainstream. This week, a report from Counterpoint Research suggests that a steep fall in 5G phone prices helped kick their U.S. sales into high gear, though the firm notes that the numbers will likely change substantially following Apple’s entry into the 5G market this month.
The trend lines are clear: Average selling prices of 5G phones fell by $218 from January 2020 to July 2020, reaching an all-time low of $730 — a drop of roughly 30% — while 5G phones increased their share of total smartphone sales from 3.3% to 11.6% during the same period. Counterpoint notes that the August percentage is an even higher 13.5%, aided in part by the release of even more affordable phones such as the T-Mobile/TCL REVVL 5G. That’s a sharp uptick from 2019, when 5G was found largely in phones priced at or over $1,000, and constituted only 1% of sales.
Adoption of 5G technology remains a chicken and egg scenario worldwide, as carriers are hoping for widespread 5G device adoption to justify buildouts of 5G networks and dismantling of older 3G tower hardware, but neither can fully happen without the other. Once higher speed, lower latency 5G towers are ubiquitous, carriers have promised that transformative new industrial, automotive, and mixed reality applications will become widely available, but 5G’s initial adoption is relying largely on business and consumer demand for faster internet access.
5G’s growth in the United States is especially interesting given the comparatively mediocre performance of U.S. 5G networks, which have continued to deliver uneven and inconsistently better than 4G performance across the large American geography throughout 2020. There’s little question that multiple and aggressive pricing moves by leading 5G chipmaker Qualcomm are enabling the new technology to rapidly reach more affordable handsets, most recently including mainstream models that users would purchase regardless of their 5G capabilities. Even so, Counterpoint says that Samsung’s $1,200 Galaxy S20 Plus 5G has been the year’s top selling 5G phone to date, despite the availability of numerous less expensive models.
That seeming discordance may account for Apple’s expected division of the first 5G iPhones into two categories: Pro models priced upwards of $999, and standard versions starting at $649. While iPhone 12 Pro models are expected to include full 5G connectivity, including support for low, mid, and high band frequencies, regular and “mini” iPhone 12 models will likely support only low and mid band “sub-6GHz” 5G. In the U.S., that may practically cap the standard iPhone 12s at peak speeds of 1Gbps or less, while the Pro models could reach 2Gbps or higher speeds when connecting to millimeter wave towers — for now, in extremely limited locations. As Apple accounts for at least 40% of the total U.S. smartphone market, sales of all iPhone 12 models are forecasted to raise both 5G’s fractional percentage of the market, and average selling prices.
Adoption of 5G smartphones has been sharply higher in China. An earlier Counterpoint report noted that 33% of all phones sold in China during the second quarter of 2020 were 5G capable, growth enabled by a combination of hyper aggressive pricing from domestic companies, government-backed 5G network rollouts, and enthusiastic interest from Chinese consumers. Globally, 5G adoption percentages are expected to quicken as 5G network deployments expand within more territories, and 4G-only chips fade out of the marketplace.