News description
    After going through a low period in 2019, 5G equipment will take off in 2020. Based on a report from Device Technologies, 5G mobile phones will start to snowball over the next five years.

 

Impact analysis
    During the next three years, the global smartphone market is expected to grow 2~3%, led by the shipment of new 5G phones. 5G smartphones are anticipated to have clear sales momentum in 2020 due to the established global 5G spectrum resource allocation. Secondly, major mobile phone chip manufacturers from the upstream chip side are planning to produce 5G SoC in the first half of 2020. Therefore, in 2020, the new kinetic energy of smartphones will likely be boosted by new 5G phone launches from brand manufacturers and the 5G purchase service subsidy program from telecom providers.

 

    As learned from 3G and 4G mobile phone sales experiences, it takes about 3~4 years to reach a 20% penetration rate, and the corresponding large-capacity high-definition AV content faced by 5G smartphones has not yet been completely developed. The time course of penetration will be delayed about 1.5 years compared to 4G due to the doubtful need to watch live videos on a large scale. It is also affected by the fact that the hardware is designed to meet high-energy consumption and heat dissipation, and the application processing and baseband chips can only be sold under separate designs. By 2023, the 5G smartphone market scale is predicted to reach some 390 million units, with a penetration rate of 26.8%. The reasons are that 5G smartphone parts will be optimized, and the application models will gradually mature, thus resulting in more affordable unit prices (about 30% reduction).

 

    So far in 2019, South Korea’s 5G smartphone market has achieved unexpected sales growth, mainly due to the rapid increase of 5G mobile users in South Korea since the South Korean telecom operators first launched 5G mobile services in April of this year. As of early August, the 5G users in that market have reached 2.01 million, as accounted for by the major telecom operators: SKT (42%), KT (31%), and LG U+ (27%). Samsung’s shipments of smartphones have increased substantially, accounting for a 10% growth in South Korea’s total shipment volume in Q2 2019 and setting a new growth high in the Q2 of the past three years.