Although 5G networks have gone live in only select locations all over the world and only a handful of 5G-ready handsets are available in the market currently, a new report from the research firm Gartner says that the next generation of cellular connectivity will grow at a rapid pace in the next few years.
From accounting for just around 6 percent of total smartphone shipments next year, the sales of 5G-enabled handsets are expected to make up 51 percent of total sales by 2023. Gartner's research director Ranjit Atwal believes that this growth will be propelled by increasing network coverage and decreasing prices of 5G smartphones.
At the moment, only a few handsets in the market support the next generation of cellular connectivity, including the Samsung Galaxy S10 5G, OPPO Reno 5G, Xiaomi Mi Mix 3 5G, LG V50 ThinQ 5G, and Motorola Moto Z3, when connected to the Moto Mod. However, with the exception of Xiaomi's and Motorola's offerings, which both cost around $700, the other phones carry a price tag of more than a thousand bucks and needless to say, an average customer will not be willing to pay this much for a phone.
However, since smartphone manufacturers are counting on 5G to take out the market from its current lull, they will have to extend 5G connectivity to mid-tier phones to get more users to upgrade. Gartner expects affordable 5G-ready handsets to arrive in the market by 2020. Samsung, Xiaomi's Redmi, and Huawei's sub-brand Honor have already indicated that they are working on mid-range 5G handsets and more manufacturers are also expected to jump the bandwagon.
This has become more of a necessity now, as Gartner forecasts the combined sales of PCs, smartphones, and tablets to witness a year over year decline of 3.3 percent. Of these, the smartphone market is speculated to be hit the worst, as the shipments of handsets are projected to go down by 3.8 percent in 2019.
More specifically, around 1.7 billion smartphones are expected to be shipped this year, a 10 percent decline over the figure recorded in 2015. Thus, if manufacturers do not innovate, users will continue to stick to their current handsets for longer and avoid upgrading unless they see a utility in new devices. It appears that simply adding more camera units or packing in a larger battery just doesn't cut it anymore.
It is believed that the trend of longer upgrade cycle began last year and smartphone lifespan is expected to continue to increase this year. In fact, Gartner says that the usable life cycle of premium phones will increase from 2.6 years to around 3 years in 2023.
Thus, unless users are incentivized with new features to get a new device, they are likely to cling to their older phones. In a previous report, Gartner had said that foldable phones are expected to account for five percent of all the sales in the high-end market by 2023. Together, the new form factor and the next generation of cellular connectivity are expected to revive smartphone sales.
Right now, 5G networks are only available in the major cities of the U.S, the UK, South Korea, Switzerland, and Finland, and even in those cities, coverage remains limited. However, mobile operators plan to roll out 5G networks to more cities in the future and by 2020, Gartner expects 7 percent of the carriers in the world to offer 5G service.