IHS Markit: 5G subscribers in Asia and North America set to rise to 1.1 billion by 2023
by Elias Aravantinos, principal analyst, IHS Markit
Introduction:
The rollout of 5G technology will proceed at blistering pace, with the number of subscriptions in Asia and North America set to exceed 1 billion units by the technology’s fifth year of deployment, nearly triple the total for 4G during the same time period.
Starting from a negligible level this year, 5G subscribers in the Asia Pacific and North America regions will soar to 1.1 billion units by 2023. In contrast, 4G’s subscriber base in the two regions amounted to just 417 million units in 2014 five years after that technology’s initial deployment.
Several factors will contribute to 5G’s rapid rise, including the early availability of a large number of compatible devices.
“During 4G’s first year of launch, there were only three smartphones available to consumers that supported the standard,” said Elias Aravantinos, principal analyst at IHS Markit. “On the other hand, 5G boasts at least 20 smartphone designs available for release to the market this year. This demonstrates the high degree of market readiness for 5G, and its capability to attain high volumes more quickly than 4G.”
4G vs 5G subscriptions for 1st five years in North America and Asia
Asia moves to the 5G vanguard:
While North America initially will lead the world in terms of 5G installed base, the Asia-Pacific region will rise rapidly and surpass it in 2021. By 2023, Asia Pacific will have a 5G installed base of 785 million, dwarfing the 294 million total for North America.
“Asia Pacific is destined for 5G market domination thanks to the massive deployment of the technology in China and India,” Aravantinos said. “Led by deployment in these countries, 5G will reach its so-called ‘golden year” in 2023, when 5G will be present in most handsets.”
Handsets make early entrance:
A raft of 5G-enabled smartphones will be introduced or have already been rolled out in 2019. In North America and Asia, 5G phones on the market this year include the Motorola Moto Z3 with the 5G Moto Mod, the Samsung Galaxy S10 5G and the LG V50 5G. In Europe, 5G models will include the Xiaomi Mi Mix 3 5G, the Oppo Reno 5G, the OnePlus 7 Pro and the Huawei Mate 20 X and Mate X.
The future of 5G:
In addition to the ready availability of phones, 5G demand will be stimulated by its compelling capabilities. While today’s 4G phones often require data buffering that slows down performance, 5G smartphones will be able to perform such tasks instantaneously. With today’s 4G LTE service, downloading a high-definition movie might take 10 minutes, but with 5G technology this could take a matter of seconds. In practice, these faster speeds will allow for the seemingly instant transfer of data.
The lower latency of 5G will substantially reduce lag and help improve streaming applications like online gaming, video calling, and interactive live sports experiences, among others.
A comprehensive look at 5G
As network operators and smartphone makers across the globe race to deploy 5G, IHS Markit has launched “5G First Look,” a new service that provides insight into the world of 5G and how 5G networks perform. It includes 5G readiness benchmarks, 5G smartphone teardown analysis, and first-look results from comprehensive, scientific 5G network performance testing in South Korea, the United States, Switzerland and the United Kingdom—with more countries and regions added as 5G networks launch across the globe.
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Editor’s Note:
While IHS Markit says the rollout of 5G is proceeding at a “blistering pace,” it is all a publicity ploy based on 3GPP Rel 15 NR NSA with only enhanced mobile broadband in the data plane. The deployment of standardized 5G hasn’t started yet and won’t until late 2021 at the earliest!
We completely disagree with all of the above forecasts, simply because we really don’t know what the market will be for standardized 5G= IMT 2020 radio and non radio aspects. In our opinion, the key IMT 2020 deliverable will be ultra high reliability with ultra low latency (1 of the 3 agreed upon 5G use cases). That won’t be realized until 3GPP Release 16 has been completed or another RIT/SRIT proposal has been accepted, e.g. Nufront’s (which is different than RIT submitted from China which has advanced to next step).
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IMT 2020 standard status updated today with several new Appendices:
https://techblog.comsoc.org/2019/07/17/itu-r-wp5d-brazil-meeting-imt-2020-rit-srits-from-3gpp-china-korea-advance-nufront-submits-new-rit/
Taiwan chip company Mediatek makes progress on 5G System on a Chip (SoC), CitiCorp
Mediatek’s 5G SoC is sampling out to customers in 3Q19. It is expected to start mass production using TSMC’s 7nm technolgy from 1Q20. While it seems the top three smartphone makers are adopting captive chipsets for their 5G smartphones, the accelerating 5G adoption from other smartphone makers benefits the first wave merchandize 5G chipset makers such as Mediatek. Mediatek may see enhanced competition from Qualcomm (QCOM) on 5G.
However, the business nature of 5G with a higher ASP and a likely better GPM (Gross Processing Margin) should bode well for Mediatek’s smartphone business in 5G in 2020 and onward. In addition to its first 5G SoC, Mediatek has more SoC products in the pipeline to address different market segments for 5G products. The next 5G SoC will be available in the market in 1H20.
by Josh Builta, IHS-Markit senior principal analyst for transformative technologies
Real-world 5G networks are now a reality. In the first half of 2019, multiple operators in North America and Asia launched wireless 5G networks. As of early 2019, IHS Markit noted launches of 5G networks in 11 countries by 20 different operators. Although the availability of many of these networks is limited to a handful of markets as carriers stress-test the systems and slowly roll them out to different users, the launches do represent an important stepping stone for 5G technology. These initial networks will expand in coverage and capability in the coming months, and more operators will launch their first 5G networks by the end of the year.
Growing 5G infrastructure revenue indicates increased investment and preparation for the technology. While much of the growth in 2019 stems from activity in South Korea and the US, mobile operators in other countries are expected to ramp up their investment in 5G equipment over the next 12 months. In China alone, its three service providers have budgeted at least $1.34 billion for 5G in 2019. IHS Markit estimates that total 5G hardware infrastructure revenue will increase from just $759 million in 2018 to over $20 billion in 2022. The first 5G-capable devices have been released in recent months. Given the initial focus on the enhanced mobile broadband (eMBB) and fixed-wireless access features of 5G technology, it is not surprising that the first wave of devices have been smartphones and routers. While the initial selection of devices is limited and the devices come with very high average sales prices, this represents an important milestone for the technology. Less expensive devices are expected to be released in the next six months, supported by a growing list of competitive 5G modems from Qualcomm, Samsung, Intel, Mediatek, HiSilicon, and UNISoC. An IHS Markit survey of consumers found that demand for 5G devices is strong: 66% of respondents said they would wait for a 5G device before making their next smartphone purchase. As a result, IHS Markit estimates shipments of 5G handsets to reach nearly 9.5 million in 2019 and 609 million by 2025. Another driver for the growth in the 5G readiness score is growing interest and investment from the potential enterprise end-users of 5G technology. An IHS Markit survey of decision-makers from six industries—automotive, consumer, healthcare, manufacturing, power and energy, and telecoms—found that 78% believe there is strong-tosignificant interest in 5G adoption within their industry. Perhaps more important, the survey also found that 48% of respondents believe their organizations will invest high or significant resources in the technology over the next 12 months, which will be critical to hastening adoption.
The confluence of these factors led to the increase in the overall 5G readiness score in Digital Orbit Q2 2019. Looking at the scores in more detail, we can see which specific measures contributed to this increase:
• Technology development, which grew due to the growing number of networks and devices • Industry investment, an indication of the financial outlay from operators and potential enterprise adopters
• Industry demand, an increase based on survey results
https://cdn.ihsmarkit.com/www/pdf/0819/IHS_Markit_5G_Insights.pdf