About 50 telecom operators around the world have launched commercial 5G services and the number is expected to more than triple to 170 next year, indicating that 5G commercialization should proceed faster than expected, Market Intelligence & Consulting Institute (MIC, 產業情報研究所) said.
The Taipei-based market research firm said that the prices of 5G handsets are expected to drop rapidly, so shipments should rise significantly from this year’s estimated 17.26 million units, the Chinese-language Liberty Times (the Taipei Times’ sister newspaper) cited MIC senior analyst Kay Chung (鍾曉君) as saying at a forum focusing on 5G applications and industry trends in Taipei on Wednesday last week.
MIC estimated that global 5G handset shipments would hit 260 million units next year and 540 million units in 2021, the Liberty Times reported on Thursday.
As one of the most noticeable cases of 5G commercialization the world over, South Korea saw the number of subscribers exceed 4 million just six months after launching 5G services in April, Chung said, adding that the figure accounts for more than 6 percent of the country’s population.
She said that 5G mobile data usage averaged 25 gigabytes per person per month in South Korea, with services featuring virtual reality and augmented reality functions accounting for 20 percent of 5G traffic, while demand for high-volume video streaming services also proved popular.
The first wave of 5G applications would focus on broadband applications, especially audio-video entertainment and video games that require a lot of bandwidth, while they are expected to become more varied and be integrated in different industries, Chung said.
While 5G has faster transmission speeds, 5G signals have a shorter transmission distance than 4G signals and do not transmit very well through walls and tend to weaken during transmission, Chung said.
As a result, there are expected to be more base stations, switches and servers for 5G networks than for 4G, which should drive demand for 5G system-on-chip solutions, radio frequency materials, power amplifier components, base stations and other related equipment, Chung said.
“The 5G trend looks set to bring exponential growth opportunities for Taiwanese component makers and networking equipment suppliers. As the market expects 5G handset shipments to exceed 200 million units in 2020, we believe related suppliers will see a strong first half of 2020, despite seasonality,” Yuanta Securities Investment Consulting Co (元大投顧) analyst Wang Deng-cheng (王登城) said in a note on Thursday.
However, challenges for the 5G industry include telecom operators’ attitude toward 5G investment, the realignment of the 5G supply chain and the progress of 5G spectrum license granting, Wang said.
The National Communications Commission is to hold a 5G spectrum auction starting on Dec. 10.
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