You may have heard or seen headlines about something called 5G and may be wondering what it is and how it may affect your life. If you haven’t heard, 5G is coming to a cell phone near you! This massive global infrastructure upgrade race has begun to crystalize and be deployed. Conversions will begin later this year and will really get going in 2020.
So, What is 5G?
5G (5th Generation) is the latest generation of cellular mobile communications. It succeeds the 4G (LTE/WiMax), 3G (UMTS) and 2G (GSM) systems. 5G performance targets high data rate, reduced latency, energy saving, cost reduction, higher system capacity, and massive device connectivity. The first phase of 5G specifications in Release-15 will be completed by April 2019 to accommodate the early commercial deployment. The second phase in Release-16 is due to be completed by April 2020. (Source: Wikipedia)
How Will this Affect our Lives?
The evolution to 5G will allow for much faster data speeds, faster internet searching, improved urban cell connectivity, and allow for a significant increase to the number of devices that can connect remotely to, and be controlled by, remote devices.
Speed – The Obvious Benefit
Do we really need more speed? Isn’t the experience of browsing the internet from mobile devices already good enough? It’s hard to envision faster connectivity, but the following chart will provide you some graphical representation of just how much improvement is in store in this upgrade to 5G.
The Internet of Things (IoT) – More Devices Connected and Controlled
We won’t be just searching the internet or buying goods from our smartphones or wireless devices in the future. The speed of 5G will allow for many more devices to be connected and interconnected. This is known in the industry as the Internet of Things and it’s changing the way technology is integrated into our daily lives. IoT needs the fast data speeds of 5G to be successful. As it evolves, IoT will kick off many exciting improvements for consumers while transforming business. For a quick lesson on IoT, check out this video produced by the IBM Think Academy:
Self-Driving Cars – This network will be so fast that it may be able to coordinate self-driving cars. Truly autonomous driving with cars talking to networks and the internet would work somewhat like an automated air traffic controller for the streets.
Medicine – Virtual doctors will be able to monitor patients and have meetings without time delays. This could change the entire cost structure of healthcare while improving lives.
Video Gaming – Why would anything need to be on a disc when download speeds can be this fast? Brick and mortar retail companies like GameStop will have further questions around their traditional retail approach. How about virtual reality becoming mainstream and not just a vision or fantasy?
Video and Television Viewing – 5G speed will allow the ability to download movies and content virtually instantaneously, and will continue to transform movie watching, cable and the entertainment experience. Coupled with Virtual Reality, the consumer may be in for some really exciting entertainment enhancements in the coming years.
The internet, mobile phone and wireless connectivity industry is not only changing and enhancing lives, but remains a massive growth opportunity for investors. It also poses continual threats to mainline traditional businesses. Cable companies, as we know, are significantly disadvantaged by the ability to view cable and movies from virtually anywhere. Traditional auto makers could see declining sales as autonomous driving goes mainstream. What about the Uber’s and cab industry? And cell phone manufacturers and operators? Who is in the lead? Samsung, Apple, Google, Huawei? What semiconductor companies will dominate the next decade? Will Intel reemerge with new technology or perhaps Qualcomm? Or will Nvidia keep the lead in the fastest, next generation gaming and entertainment chips? Will a new firm emerge? Will this upgrade cycle be the next boom in handset manufacturers, or will this hurt them? As everyone waits for the new 5G phones to roll out, will that hurt Apple and Samsung and other leading handset manufacturers? Or will this massive upgrade cycle be the next sales boom for these manufacturers presenting a great buying opportunity? So many questions! 5G and the Internet of Things will certainly improve, while at the same time disrupt, many industries across the globe. Investors will have to be very aware of this enhanced speed that is coming and how it may positively or negatively impact businesses, growth rates, competitive threats, and complete disruption of traditional lines of business. This can be both an opportunity and risk to investors.
5G is upon us and the race is on – so what do we need to do and when?
5G is being built out around the globe and China seems to be in the lead as they upgrade their towers and systems. AT&T, Verizon, et al are scrambling to upgrade their networks to claim their stake as the leading 5G provider. The U.S. has been slower but is beginning to ramp up faster. The first 5G phones are likely to hit the market this spring, and it looks like Android phones (Google) may be the first to market. Apple is lagging and likely won’t have a 5G phone until early 2020. Apple has also been mired in a legal battle with Qualcomm and this may end up hampering Apple’s 5G efforts as Qualcomm emerges as a leading 5G chip maker. However, until the 5G network is better built out, the phones won’t add much value. It looks like 2019 will be a transition year and 5G will likely take full hold in 2020. Buyers of smartphones and investors should all be aware of this.
5G phones, when they roll out, will continue to work with the existing 4G and LTE networks currently in place. But not vice-versa. So, if you have an old 4G phone, you will need to consider when it is best to upgrade. It is hard to envision the need to upgrade until at least 2020, but consumers should understand this is on the horizon, and should ask these questions before buying their next smartphone or wireless device.
Technological enhancements and mobile connectivity have been an amazing growth industry and one that has transformed lives, mostly for the better. 5G is a massive upgrade that will allow for continued evolution, more connectivity and more devices. This should be fun, and investors will have to continually monitor progress and weigh the opportunities and the risks accordingly.