The biggest 5G opportunity for the electronics supply chain -- infrastructure -- is also its biggest inhibitor, according to one industry expert. Base stations, towers and data processing centers require a lot of industrial electronics, but nobody -- literally -- wants them in their backyard.
“2020 will be the year that 5G scales,” Qualcomm Inc. President Cristiano Amon told an assembly at CES 2020. “We are very happy to see that the industry has progressed so that today, even if you want to use it with 4G while waiting for base stations to be built, the best 4G phone on the market today is 5G.”
The global 5G infrastructure market was valued at around $1.3 billion in 2018, according to Zion Market Research. It's expected to reach approximately $22.5 billion by 2025, at a CAGR of 50.1 percent between 2019 and 2025.
The transition is beginning — operators are deploying small-scale 5G networks the U.S., China, Korea, Japan and Australia, Amon said. “The network is moving from pilots to initial launches in metropolitan areas, so I think it’s fair to say in 2020 you are going to see 5G in most major cities in the U.S. We are now the process of building coverage.”
Qualcomm’s San Diego campus and its surrounding neighborhood has 5G, he noted.
“What’s really happening – what’s pacing the scale of coverage – is 5G requires more sites and more towers,” Amon explained. “The situation, especially in the United States, is operators have to negotiate municipality by municipality – sometimes neighborhood by neighborhood — how to get new sites. It takes a very short time to deploy a base station; it takes a very long time to get new sites.”
Ironically, the same public that’s impatient for 5G doesn’t like sprawling towers and power-sucking industrial buildings. 5G requires a dense infrastructure.
“On one hand, people say they want 5G and ‘where is my 5G, but I don’t want sites in my neighborhood,’” Amon said. “The two things are not compatible.”
What 5G looks like
Local politics aside, the 5G build-out is taking place alongside 4G. The change will be gradual.
“The first thing [consumers] are going to see is you have much higher speeds – an order of magnitude increase – and lower latency,” said Amon. “Some of the services you use every day will be much better.” Similar to 4G’s impact on streaming music, video will be the game changer – literally — for 5G.
5G will be the main platform for video distribution, Amon explained. “You will have a reliable connection to view news and sports and [5G] will finally deliver on user-content generation. Everyone will become a broadcaster because you have the speed to upload high-quality video to the cloud.” Microsoft and Google are predicting mainstream gaming will move away from consoles and on to smart phones. “Gaming will become a thing of the mobile industry,” Amon said.
Phones will remain 5G’s preferred delivery system. Qualcomm foresees companion devices springing up for a wide range of applications. “Today we know, even with some of the chips we are making, the limitation is the size of the screen. We have the processing power, and with the power of the hyperscale cloud, you can do almost anything. The only limitation is still the size of the screen.”
Wearable technology bridges those gaps. Device makers envision eyeglass-sized screens containing cameras, AR and facial-recognition capability. “I like to describe it as, you walk into a meeting and with facial recognition, you go immediately to the cloud and scan social media networks to get information on all the people you’re going to meet,” Amon said.
The automotive industry will see the biggest transformation with the advent of 5G. “This will range from upgrading your fundamental navigation system and ADAS as the car is connected to other cars and pedestrians and the cloud,” Amon explained. “You can populate a map with the location of all these things and how they move or how fast they move and use AI to make predictions. This is going to significantly upgrade ADAS and autonomy.”
Automotive connections (including those made by embedded SIMs and aftermarket devices in passenger vehicles) will continue to be the most important component of the total wide area IoT connectivity market, according to research firm Analyses Mason. The number of automotive connections worldwide will increase to 831 million by 2027 and will account for just over 20 percent of all IoT connections (49 percent of traditional cellular IoT connections). More importantly, this sector will generate over $9 billion in connectivity revenue.
Consumer demand – and investment – will accelerate the infrastructure build-out, Amon suggested. “The elevator pitch on what 5G does – connecting whatever device you have, phone to cars to the IoT —is based on technology that has a very wide pipeline that connects to the cloud 100% of the time. No matter what devices you have, you can connect two systems and have unlimited storage and unlimited data.”
5G is no longer the exclusive technology of the mobile industry, he concluded. “It’s part of the automotive conversation, it’s part of the IoT conversation, it’s part of the computing conversation. We have to count on all those companies sharing those visions. We are just at the beginning of this great transition.”
This article first appeared on Aspencore's CES 2020-dedicated site.