5G Won’t Revive Smartphone Sales But Increase Prices: Report

While both the wireless industry and the consumer electronics segment spent the last several years hyping up the fifth generation of mobile networks and presenting it as the innovation that will bring the mobile space to the next level and help it to continue growing despite numerous obstacles, the technology isn’t likely to revive global smartphone sales, at least no during its maturing stage. A new report indicates handset prices will go up approximately 20-percent once 5G becomes a commercial reality, with most devices capable of communicating with the new wireless standard being likely to command a hefty investment on the part of consumers.

As a consistent increase in prices — particularly in the flagship price bracket — is still being described as one of the main reasons for the current stagnation of the global smartphone market, more expensive parts that will raise manufacturing costs which companies are likely to pass on to consumers in their entirety seem to be positioned to offset the benefits stemming from the latest mobile communications specification which is promising unprecedented network capacities, latencies, and speeds.

Investors need their profit margins

While most major smartphone manufacturers are more than capable of taking a near-term performance hit by absorbing at least a portion of the increased costs of commercializing 5G, thus increasing their competitiveness in the early days of the technology, investor pressure is expected to discourage them from doing so. The likes of Samsung, Huawei, and LG are aware of the fact that their rivals are facing similar decisions and are hence likely to play it safe, counting on the rest of the industry to follow suit. Most high-profile handset brands are projecting stagnation or decline in terms of revenue and profit in 2018, with those expectations already doing a lot to displease investors in recent days. Due to that state of affairs, the leading companies in the segment appear to be preparing to focus on growing profit margins in 2019 and work on improving their other performance indicators that aren’t solely dependent on an overall increase in global sales, something that’s unlikely to happen over the course of the next twelve months.

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The most polarizing network tech upgrade yet

While all previous network upgrades in the history of the industry were initially met with a largely positive response from both consumers and analysts, 5G is somewhat more polarizing due to the fact that it won’t deliver an immediate benefit to end users until network operators and handset manufacturers manage to optimize their products and services in order to truly start leveraging the 3GPP’s latest wireless specification. At the same time, the first wave of 5G-ready (Android) smartphones is expected to exhibit some degree of issues with battery life and heating given how the new mobile standard is significantly more power-hungry and also requires dedicated antennas that will either limit the space available for handset cells or force designers to create noticeably bulkier devices. Most of those problems are likely to be addressed within a year or so but for the time being, everyone apart from the most hardcore tech enthusiasts is advised to avoid purchasing the very first 5G-ready Android handsets that will be hitting the market in the coming months.


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