Deloitte: Mobile Consumer Survey shows tepid demand for 5G
Research from Deloitte suggests consumers are currently struggling to become enthusiastic about 5G networks. Wireless network operators all over the world are currently trying to create excitement for 5G, often in a bid to get customers to pay more each month for the service. But for the most part, they haven’t come up with any compelling NEW 5G applications or use cases.
The 5G focus continues to be on enhanced mobile broadband which most consumers are not very much interested in. The reason is that 4G-LTE is perfectly adequate for most video streaming and other high bandwidth applications today. 5G is yet to have a “killer application” for general consumers. Until that happens, it’s going to be a hard sell, according to Deloitte.
We have repeatedly stated that the real value of 5G will be in industrial automation, robotics and medical wearables all of which will take advantage of ultra high reliability/availability and ultra low latency. That is hopefully coming in 3GPP Release 16 which MUST be folded in to 3GPP’s IMT 2020 RIT/SRIT submission to ITU-R WP 5D sometime in mid to late 2020.
From the Deloitte report:
As 5G rolls out, we’re starting to see Australians value different dimensions of connectivity, such as reliability and latency. And this will require operators, handset manufacturers and other parts of the ecosystem to get the consumer proposition right – and continue to evolve it.
Some possible emerging technologies like VR/AR could be an important 5G application, but only when ultra low latency is included in IMT 2020 and has been widely implemented. Mobile game streaming, like Google Stadia and Project xCloud, might be another use-case for 5G networks at that time.
From Deloitte’s Mobile Consumer Survey – a multi-country study of mobile users:
• The impending roll out of 5G in Australia is being met with a lukewarm reception from consumers. Current use cases appear tilted towards the enterprise and up to 84% of consumers are not convinced it is worth the proposed $15 monthly premium operators are vying for.
• 5G interest among consumers is decreasing, with the percentage of respondents who would switch to 5G as soon as it is available or upon hearing good things, down by 5% compared to 2018.
• Consumers are increasingly wary of the data they share and conscious of their right to withhold information, with 52% of respondents having used privacy enhancing applications and 89% at some point having denied an app access to location, photos, contacts, or other mobile phone features.
• Convenience and growing availability are driving increased use of biometric authentication.
• Since 2017, adoption of facial recognition software on the phones of respondents has seen a 100% compound annual growth rate (supported by the release of the iPhone X and other handsets), while fingerprint-authorized payments is also on the rise, especially among millennials.
Peter Corbett, Deloitte Partner and National Telecommunications lead stated:
“We are probably entering a period of disillusionment with the technology until it becomes clearer for consumers on how 5G will improve their day-to-day lives.”
Corbett believes 5G early adopters should be prepared to not receive the experience they’d expect from a new generation network.
“Consumers should prepare to be disappointed with 5G in the short-term, as the network will experience growing pains until it is fully established which will come with small-cell deployments and the auction of mmWave in early 2021.”
Hype around the globe:
Part of the tepid reception to the 5G roll out may be due to infrastructure delays. In South Korea, where the technology was first rolled out, a million subscribers signed up within 69 days; 11 days faster than 4G’s uptake.
However, this was driven by aggressive commercial promotions from local mobile operators showing K-pop idols as the world’s first subscribers rather than due to 5G-service functionality, which had a number of issues with coverage and speed on launch.13 Korean consumer hype was also driven by strong demand for 5G devices, with the Samsung Galaxy S10 5G’s launch based in South Korea.
Similar hype was experienced in the UK, with mobile operator EE launching 5G in June this year, to be quickly followed by Vodafone, Three and O2 by the end of the year.15 Initial reviews indicate the potential for uptake is there but coverage has a long way to go, with maximum speeds yet to be reached in the first six cities for 5G deployment.15 The consensus has been that the roll out of 5G has been smoother than 4G, and that moving to a 5G plan is not worse. However, it will likely only be the early adopters using the network until greater coverage and device diversity are available.
The complete 2019 Deloitte Mobile Consumer Survey (Australia Edition) can be downloaded here after you complete a brief form. The 2019 study comprises more than 44,150 responses across 28 countries. Australian findings are based on a nationally representative sample of over 2000 consumers aged 18 to 75, polled online during June 2019.
U.S. Mobile Consumer Survey:
Information about the U.S. edition is here. It will be available in December 2019. For this year’s report, Deloitte surveyed 2,000 US-based consumers to learn more about behaviors and trends that are influencing a wide range of wireless and mobility products and services. This eighth edition of the Global
Mobile Consumer Survey also highlights the differences among US consumers across generational divides—capturing findings from six distinct age groups, ranging from ages 18 to 75. Here are a few key data points from the executive summary of the survey:
- While smartphones continued to thrive over the past year, other mobile platforms (including tablets) showed signs that the market is still trying to figure out if—and where—they fit. At the same time, all consumer age groups showed increased awareness about data privacy and security.
- U.S. consumers expressed growing interest in voice assisted technologies, certain Internet of Things (IoT) applications
and devices, and the introduction of fifth-generation (5G) wireless
- Overall, 60 percent of respondents indicated that 5G is either “fairly” (34 percent) or “very” (26 percent) important to them now, compared with 55 percent who felt that way a year ago (see figure 12). The perceived importance of 5G is highest among the 25–34 age group (77 percent believe it’s either “fairly” or “very” important), followed by the 35–44 (73 percent) and 18–24 (69 percent) age groups.
- 29 percent of survey respondents now believe that their current 4G/LTE network speed at home is either “a little” or “much” faster than their home Wi-Fi (vs. 27 percent in 2017). 29 percent perceive no difference in speed, and 22 percent say their 4G/LTE is either “a little” or “much” slower than their home Wi-Fi.
6 thoughts on “Deloitte: Mobile Consumer Survey shows tepid demand for 5G”
Great information and summary, Alan. Yes, the key is whether people are willing to fork out more dough for a service that is the same. As you point out, there will have to be new applications that somehow create a bigger pie to pay for the enormous investment carriers are making.
The other thing that would have been an interesting survey question is the fear of the potential negative health impact from 5G. Whether warranted or not, anecdotally in Silicon Valley, neighbors are objecting to small nodes and are creating petitions to ban nodes within, say 300′ of a house. I wonder if this will lead to a NIMBY (Not In My Back Yard) 5G movement that significantly alters the rollout of 5G?
Some 5G pundits contend that the new network generates radiofrequency radiation that can damage DNA and lead to cancer; cause oxidative damage that can cause premature aging; disrupt cell metabolism; and potentially lead to other diseases through the generation of stress proteins.Some 5G pundits contend that the new network generates radiofrequency radiation that can damage DNA and lead to cancer; cause oxidative damage that can cause premature aging; disrupt cell metabolism; and potentially lead to other diseases through the generation of stress proteins.
NY Times: The 5G Health Hazard That Isn’t
According to experts on the biological effects of electromagnetic radiation, radio waves become safer at higher frequencies, not more dangerous. (Extremely high-frequency energies, such as X-rays, behave differently and do pose a health risk.)
In his research, Dr. Curry looked at studies on how radio waves affect tissues isolated in the lab, and misinterpreted the results as applying to cells deep inside the human body. His analysis failed to recognize the protective effect of human skin. At higher radio frequencies, the skin acts as a barrier, shielding the internal organs, including the brain, from exposure. Human skin blocks the even higher frequencies of sunlight.
“It doesn’t penetrate,” said Christopher M. Collins, a professor of radiology at New York University who studies the effect of high-frequency electromagnetic waves on humans. Dr. Curry’s graph, he added, failed to take into account “the shielding effect.”
That there is no set 5G spectrum has been omitted from early opposition (but is getting more attention of late). Emphasis has been on millions of new, closely spaced fixture installations nationwide, up and down ‘Your Street USA,’ due to the short range and easy block-ability of MMW. We still see this. But things seem to have changed – or something…
Here’s a discussion on new Qualcomm MMW smartphone antennas that cover four bands between 26.5GHz and 40GHz. Also discussed are antennas for the top end of MLB: “…a four-member family of radio modules designed for larger cell 5G coverage – that is, outside the dense urban areas and indoor environments … The QPM56xx RF module family works with the Snapdragon X50 modem to work in the sub-6GHz bands [emphasis added] … The modules include switching designed to optimize massive MIMO applications…” “MIMO” refers to new antenna design/operation.
As noted, even the Industry hasn’t settled on final arrangements (pun intended). The following synthesis is the result of wading through too many articles to give credit to any one. Some even disagree with each other.
So here goes: A new “5G NR” international wireless standard has been issued, comprising two frequency ranges, FR1, FR2. Number one is for current bands below 6 GHz (5Gmlb), such as 600MHz, 1900MHz, and 2.5GHz; two is for MMW — mostly 24 to 40 GHz for mobile, and higher for special applications.
5G NR includes a more efficient way of processing data, which entails multiple technologies needing only a mention, such as beamforming, MIMO antennas, small cells and more. Thus, 5Gmlb can use the same towers as 4G, have the same distance and penetration with shorter delay, and provide at least 35 percent more speed. Plans are also in place for 5G deployments using shared spectrum in the (unlicensed, Citizens Broadband Radio Service) 3.5 GHz frequency, and all key players really want in. This is 5G, mind you.
Things get a bit stickier when it comes to needing a new phone or not. Current phones should be able to get updates to process FR1, but a new chip is needed to “transceive” FR2/5Gmmw. New phones will run into money. The advice generally is not to move yet, and here’s an example with Samsung’s $1300 5G phone (see good shot of a 5Gmmw “node”).
Which brings up a story that has drawn wide attention, especially in the UK, and one that seemed to present a puzzle. It’s about the 6/26 2019 Glastonbury Festival in Pilton, Somerset County, England, for which a decision was announced about installing “5G” network towers on festival grounds for a system demo/test.
Despite the fact that “Glastonbury officials [said] that move will allow festival attendees to access the Internet on their smartphones at faster speeds,” the announcement created a huge protest. In this story, 2G, 3G, 4G, 5G are mentioned, but “5G” is not specified as MLB or MMW — as anything, in other words.
The protest article is laced with dubious statements, notably that “5G” constitutes a massive experiment on all species. Even some much-admired professional associates/contacts of mine promote this careless notion. I must respectfully, and strongly, disagree, because the implication is that 2G-4G were/are not an experiment — even though they were/are not in a certain context. Distinctions must be made.
It’s crucial to know that all deleterious effects of EMF/RF were well understood by the wider scientific community, the UN/WHO, militaries and governments by the mid-1970s (but beginning much earlier). What was known then was later hushed up.
The decision was callously made long ago to put people/life at risk to have the technology (see Summary section 1.1.6). Thus, any “experiment” is not whether there will be harm from microwave, but the time window in which ongoing, cumulative damage — across all frequencies — will manifest in a cascade of widespread intractable illness (more in History of Awareness below). Not to worry, though, that fate might be avoided: Ecosystem collapse could bring the house down beforehand.
“While obviously not many festival-goers are likely to have a 5G phone by June, EE will be showing off what the network can do at its stand.” Once again, unspecified 5G. So was the Glastonbury demo about 5Gmmw or 5Gmlb? Whatever, tickets sold out in less than 45 minutes.
Just so, reports on the 9/21/19 protest in Bern, Switzerland clearly reflect the confusion and careless use of “5G.” This Agence France-Presse story says, “By early July, 334 antennae (sic) stations for 5G were operational across the country, authorities have told AFP.” Location and density info aren’t revealed, but could be urban or ‘near-urban.’ The number doesn’t seem to correspond to FLD in neighborhoods, but who knows, thanks to sloppy reporting (and perhaps oblivious “authorities”). The news reader is therefore in the dark about exactly what’s going on, but probably assumes it’s MMW.
Here’s what’s happening on the ground, however. T-Mobile plans a nationwide 5Gmlb rollout at 600 MHz and an undisclosed application of “28 and 39” (see video). AT&T plans to use 5Gmmw only in selected areas, mostly urban/densely populated suburban, while outlying areas will get 5Gmlb. T-Mobile, and Verizon will use at least some 5Gmmw, in some cities. Verizon will use 28 GHz and 39 GHz.
Why do other market research firms believe that 5G will greatly increase smart phone sales?
“Our view is that 5G should be seen as profit-neutral at best,” wrote the Wall Street analysts at New Street Research in a note to investors this week. “Even in South Korea, the incremental cost of 5G exceeds the extra revenue. Elsewhere 5G will be either negative for profits (China) or broadly neutral (USA, Europe, Japan) with other (non-5G) local dynamics driving profit trends.”
Acknowledged the Wall Street analysts at research firm Raymond James in their own report to investors this week: “We cannot articulate clear business plans for operators that drive incremental profits.”
The New Street analysts pointed out that South Korean mobile network operators are the only ones in the world that have priced 5G at a premium — noteworthy considering South Korean operators have already amassed a world-leading 3.5 million 5G customers. Therefore, they’re the only ones that will reap a qualitative gain from the launch of 5G during 2019, according to the analysts.
Qualcomm CFO said:
The “addressable market” opportunity in automotive (which spans telematics and infotainment products) will grow 12% to $4 billion in three years.
The market opportunity in compute (which includes Android tablets, Chromebooks and slim Windows laptops) will grow 2% to $8 billion.
And the market opportunity in IoT (which spans everything from robotics to VR to home automation) will grow 10% to $13 billion.
Finally, Palkhiwala said Qualcomm’s “long-term growth opportunities” sit in two big areas:
The combination of cloud and edge computing with AI, which will total a $13 billion SAM by 2024.
And “Advanced Driver Assistance Systems” (ADAS), which encompass driverless cars, which will total $5 billion in SAM by 2024.
China 5G rollout to drive first smartphone shipment rise in 4 years – IDC:
The global smartphone market is set to return to growth for the first time in 4 years in 2020 on the back of China’s huge investment in 5G technology, according to the latest report from IDC. Worldwide shipments are expected to grow 1.5 percent year on year in 2020 to just over 1.4 billion following falls of 0.3 percent in 2017, 4.3 percent in 2018 and an expected 1.4 percent this year. The 2020 figure is set to include 190 million 5G smartphones, accounting for 14 percent of the total, driven by recent developments in the China market along with anticipation of aggressive activity from the smartphone supply chain and OEMs, said IDC.
The report expressed the hope that 5G smartphone prices will quickly come down quickly to boost the growth of this market segment. “Following three straight years of declining smartphone volumes there leaves little room for 5G to raise smartphone ASPs,” said IDC, adding that Android vendors are expected to drive down the cost of 5G smartphones starting with a host of first quarter announcements at both CES and MWC. Apple is expected to enter the 5G smartphone market in September 2020, with the real focus around pricing and market availability.
In contrast to the expected rapid 5G growth in China, demand in other markets such as Australia, Japan, and Korea in Asia/Pacific as well as some European countries is set to be slower than predicted, added IDC. The report said shipments so far in the second half of 2019 have come in much lower than expected, with accelerated 5G adoption globally depending on factors such as the arrival of 5G networks, operator support, as well as substantial price reductions.
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