by Reinhardt Krause, Investor’s Business Daily  (IBD)

Note: The content manager and moderator of this website strongly disagrees with the theme of this article. We don’t think IoT is a valid use case for 5G because most IoT devices are low bandwidth and low duty cycle.  Also, the 5G standards won’t be finalized till late 2020 so talk of 5G deployment anytime before that is preposterous.  Yet we present this IBD article (without adverts or stock charts) to provide another viewpoint as we strived for balanced content.  Mr Krause’s IBD article has been shortened and edited for clarity and to suit our readership.

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Introduction:

Now the 5G, or fifth generation, wireless revolution is near (editor asks: really?), promising data speeds 50 to 100 times faster than 4G LTE networks. Sure it’ll improve smartphones, but that’s not the point. Analysts say 5G’s biggest impact will be to drive the proliferation of the Internet of Things — billions of connected devices.

The business case for 5G is all about IoT, an evolution, or maybe revolution, that will take the internet era into new territories. Companies including chipmakers, network equipment makers and telecom service providers are investing heavily in the technology, with the first products to roll out in 2017.

“With 5G, there are going to be many more device categories,” Matt Grob, Qualcomm chief technology officer, told IBD.

IoT encompasses such burgeoning arenas as self-driving cars, advanced robotics, telemedicine, automated factories, smart cities and the development of massive sensor networks in such fields as agriculture. Farmers will, for example, know exactly when to harvest for best yields based on air temperature and soil moisture.

Many of the companies aiming to put 5G on the fast track — Qualcomm (QCOM), Intel(INTC), Cisco Systems (CSCO) and Verizon Communications (VZ) to name a few — expect new revenue streams from the IoT and game-changing apps outside of smartphones.

Qualcomm To Ship First 5G Chips In 2017:

Qualcomm aims to ship its first 5G modem chips for phones in the second half of 2017, with follow-on chips targeting the IoT.

Qualcomm, like others, expects 5G to evolve on multiple tracks: IoT, smartphones and fixed residential. While Apple, Samsung and others will ship 5G smartphones only after standards are rubber-stamped, which observers say will be a work in progress until 2020 or later, carriers are closer with “fixed” 5G, a wireless broadband service provided from a fixed point to homes in limited areas. If  fixed 5G to homes works well in trials, Verizon says it will pursue a commercial rollout city-by-city in 2018 and 2019. It hasn’t identified the cities yet.

With 4G networks, it costs wireless firms about $1 to deliver a gigabyte of data. 5G networks promise much better economics. It also will provide virtually uninterrupted communications for new apps.

“5G is going to bring lower costs per bit, lower latency and highly reliable services,” Grob said. “So it’s going to be great for autonomous vehicles, medical devices and for infrastructure and smart cities. There are more companies taking part in the standards development for 5G than ever.”

Medical applications include remote monitoring of devices like EKGs or blood pressure monitors. Smart city technologies include traffic signals that adjust to vehicle flows and sensor-based water systems that test for contaminants in real time.

The Internet of Things isn’t waiting on 5G. AT&T (T) already has some 8 million web-connected cars linked to its 4G network. U.K.-based Vodafone (VOD) says it had 41 million IoT connections as of Sept. 30. Cisco says its gear links 4.9 billion devices now and will connect 12.2 billion by 2020, and few will be 5G.

Vendors Jockey For 5G Position:

Some companies might get a good boost early in the 5G revolution, such as makers of network testing gear like Keysight Technology (KEYS). Independent testing is a big part of the standards-setting process.

Early on, analysts say Xilinx (XLNX) programmable chips will be useful for prototyping 5G products, while the higher radio frequency bands associated with 5G may create long-term opportunities for RF chip leaders Broadcom (AVGO) , Qorvo (QRVO) and Murata.

As small cells are deployed in urban areas, cell tower firm Crown Castle (CCI) and startup Tarana Wireless aim to capture share. Tarana’s biggest investor is AT&T. Some analysts view Zayo Holdings (ZAYO) as a takeover candidate, because small cell systems require fiber-optic links in metro areas for long-haul transport.

Next-generation data centers — to keep all these things humming on the internet — will be another battleground, as Cisco takes on Arista Networks (ANET), startup Affirmed Networks and others.

Meanwhile, startup SigFox, the LoRa alliance — with members including Cisco and IBM(IBM) — and others aim to provide all IoT devices with low-power connections via Wi-Fi and unlicensed spectrum.

5G backers aim to create flexible networks that provide both the high-bandwidth connections required by fast-moving, self-driving cars in urban areas and always-on, reliable, low-data-rate connections needed by parking meters, oil rig sensors or other devices.

While 4G networks provide cars with infotainment, 5G services are expected to provide real-time environmental data so, for example, driverless cars can avoid collisions.

To service various types of devices, wireless networks will need to utilize both very high radio frequencies not yet commercialized and lower-band airwaves. Improved radio antennas and more complex semiconductors are expected to make higher frequencies usable for 5G.

In urban areas, hundreds of “small cell” antennas hung on utility poles or buildings will work together, analysts say.

Wireless networks and telecom data centers will be upgraded to provide both high and low data rate services, again to service various types of sensors and devices. AT&T and Verizon are among the leaders in moving to software-defined-network technology. SDN will help usher in 5G. With it, wireless firms can improve network bandwidth allocation and provide cloud-based, on-demand services.

Power Of Connected Data Centers Unleashed By 5G:

Part of the 5G revolution involves connecting a network of data centers to the IoT. That’s a focus for Intel, Cisco, China’s Huawei and many other companies.

“5G will be a whole transformation of the network to virtualization, providing more flexibility and agility,” said Jean Luc Valente, vice president of product management for Cisco’s cloud and virtualization group. “With 5G, with connected cars, some data is going to be collected, maybe at a traffic light intersection. Those data nuggets will be (analyzed), maybe not in the back-end data center, maybe much closer in a micro-cloud.” The upshot, among many benefits, is that self-driving cars won’t collide.

Cisco aims to provide cloud-based IoT services as it shifts away from hardware sales. The company partnered in February with Intel and Sweden’s Ericsson (ERIC) to start selling a swath of 5G hardware and services. They are involved in 5G trials by Verizon and others.

As 5G sparks partnerships, it’s also generating M&As with 5G or IoT angles.

Qualcomm expects its pending acquisition of NXP Semiconductors (NXPI) to pay dividends in autonomous cars. Japan-based SoftBank acquired wireless chip designer ARM Holdings for $31 billion with an eye toward I0T.

AT&T says it will move to 5G faster if regulators approve its acquisition of media giant Time Warner (TWX), part of its strategy to whisk more video to mobile devices.

Cisco bought Jasper in March for $1.4 billion, gaining a cloud-based IoT platform. Verizon in February announced an agreement to acquire XO Communications, which owns high-frequency spectrum for 5G services, for $1.8 billion.

Internet leaders, too, are jockeying for leading roles in 5G. Facebook (FB) is working with equipment vendors and carriers on standards. Google-parent Alphabet (GOOGL) is developing open software for the IoT.

For Intel, 5G and IoT offer an opportunity to turn its money-losing mobile business around, says Citigroup. For Qualcomm, the shift to 5G should provide higher profit margins as the 4G generation matures.

5G Going for Gold at Winter Olympics:

South Korea’s KT and Verizon are forging ahead in prestandard deployment of 5G, aiming to drive technical specifications for 5G radio gear. KT plans to showcase 5G technology at the 2018 Winter Olympics, though just how isn’t known.

Aside from the Internet of Things and 5G mobility, Verizon is eyeing fixed 5G wireless broadband services to homes, potentially taking on cable TV companies. It’s not clear yet if 5G fixed broadband could provide high-speed internet in neighborhoods or blanket bigger areas, analysts say. The Verizon trials will help determine that.

Verizon has been investing across the board — in SDN, small cell technology and fixed wireless, says Adam Koeppe, vice president of technology planning at Verizon.

“We’re putting in the building blocks for what comes next. IoT is one of them,” he said. “The goal of the IoT device evolution is to have very low-cost modules, with long battery life. Think of sensors, smart meters — things that get embedded in day-to-day infrastructure and products that communicate on low bandwidth, on a sliver of spectrum, gobbling up very little of network resources.”

“Where 5G fits into the equation is scale,” Koeppe added. “IoT will be about tens of billions of devices connected to the network. When you think of truly connected societies — traffic lights, stop signs, parking meters and everything within a city connected and interacting with itself — that’s where 5G comes into play.”

Yet 5G-related revenue is still on the distant horizon for most companies, analysts say. The marketing hype has picked up long before 5G networks and services will be deployed.

IoT revenue is about 1% of global mobile revenue now and will grow at about 20% annually over the next five years, says market research firm Analysys Mason. Revenue is small in part because monthly revenue from IoT devices might come to just $1 or $2, not the $60 or more from smartphone users.

http://www.investors.com/news/technology/5g-internet-of-things-will-change-telecom/