5G expands to more-affordable phones as chip prices fall

  • 5G
  • Tuesday, 15 Mar 2022

In all, 42% of smartphones shipped to retailers around the world in 2021 were 5G-capable, according to Counterpoint. — AFP

5G is increasingly available in cheaper phones, making faster mobile service affordable to more lower-income consumers around the world, market researchers say.

The key to this broader access to 5G service is the falling price of the specialised semiconductors needed for 5G phones, a trend that analysts expect to continue over the next two years. The lower price makes it economically feasible to put the chips in a wider range of phones.

Already, 5G technology has moved beyond the premium smartphone market, in which devices sell for US$550 (RM2,312) or more, to the midtier market where devices sell for US$250 (RM1,051) to US$550, and even cheaper 5G phones are available in some places, says Jeff Fieldhack, research director at Counterpoint Research.

"5G technology is moving very quickly downwards in terms of affordability, faster than any previous generation," says Frank Boulben, chief revenue officer of Verizon Communications Inc's Consumer Group.

In Asia, prioritisation of 5G chips by chip manufacturers in China and Taiwan is pushing chip prices lower and driving the production of budget 5G-capable devices, says Neil Shah, vice president of research at Counterpoint.

The average price of a so-called 5G system-on-a-chip that performs multiple functions is now US$40 (RM168) to US$45 (RM189), according to Counterpoint.

That price could reach US$20 (RM84) late this year or early next year, at which point it would make economic sense for more mobile-phone makers to put 5G chips in devices with a retail price of around US$150 (RM630), says Mr Fieldhack.

US carrier Consumer Cellular Inc expects to offer a 5G phone priced at US$199 (RM836) by June, and one priced at around US$150 by early next year, according to Greg Hughes, the company's vice president of portfolio strategy.

Currently the company offers 5G-capable phones priced at US$349 (RM1,467) and higher.

Mr Hughes says he expects consumer adoption of 5G to increase when the technology is available in lower-priced smartphones.

Globally, 5G capability will spread to at least 80% of phones priced under US$200 (RM841) over the next two to three years, from less than 5% now, says Runar Bjorhovde, research analyst at market-research firm Canalys.

In all, 42% of smartphones shipped to retailers around the world in 2021 were 5G-capable, according to Counterpoint.

That percentage is expected to increase to 54% this year and 66% next year, it says.

In the US., 58% of smartphones shipped to retailers were 5G-capable last year, and that percentage is expected to increase to 83% by the end of this year and to 89% by the end of 2023, Counterpoint says. – Bangkok Post, Thailand/Tribune News Service

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