The sales penetration of 5G-capable smartphones reached 51 per cent globally in January this year, surpassing the penetration of 4G smartphones for the first time, according to Counterpoint Research report. Here’s what driving growth and more:
What are the biggest drivers
China, North America, and Western Europe were the biggest drivers of this growth. China had the highest 5G penetration in the world at 84 per cent in January. The push for 5G from Chinese telecom operators, combined with the readiness of original equipment manufacturers (OEMs) to supply competitively priced 5G smartphones to consumers, enabled this growth, according to Counterpoint Research. The push for 5G from Chinese telecom operators, combined with the readiness of OEMs to supply competitively priced 5G smartphones to consumers, enabled this growth.
How Apple proved to be the differentiator
“After Apple shifted to 5G in October 2020 with the iPhone 12 Series, North America and Western Europe saw a natural increase in the sales penetration of 5G smartphones,” said research analyst Karn Chauhan.
This demand is also fuelled by iPhone users who are ready for new devices after years of holding on to their older iPhones. For many, holding periods are nearing four years, the average replacement cycle for iPhones.
5G is affordable
Another reason behind the growth is affordability. Over the last one year the price of 5G smartphones has come down. Buyers in India too can esaily get 5G smartphone options under Rs 20,000. “Thanks to the affordable chips offered by MediaTek and Qualcomm, Android 5G smartphones entered the mid-to-high ($250-$400) price segment and are now trickling down to the $150-$250 price range, contributing one-fifth of the 5G sales in January,” Chauhan said.
Where is India
India still awaits to experience the 5G technology. The 5G technology made to this year’s Union Budget with the Finance Minister Nirmala Sitharaman saying that spectrum auctions will be conducted this year to roll out 5G services by private telecom providers. It is likely that the same may take place in the second half of the year. All three telecom companies in India are running 5G trials.
Other than India, Asia-Pacific, Middle East, and Latin America are the next focus areas for OEMs to increase 5G penetration. 5G models in the sub-$150 price segment are the sweet spot for these regions, which are currently dominated by 4G. “The low-end 5G SoC is priced more than $20 at present. Once it comes down to sub-$20, we will start seeing 5G smartphones in the budget segment,” said the report.