MWC19 is upon us and it’s poised to be an exciting show thanks to the hype around 5G and revolutionary hardware innovations, such as foldable displays. While 5G will be the buzz word of MWC19, we are unlikely to see many consumer-oriented 5G device/service unveilings because of the premature state of the technology in terms of network deployments and device hardware developments. Yes, there will be demonstrations of the potential uses of the technology, such as AR/VR solutions powered by 5G-enabled edge computing, or robotic surgery equipment leveraging the low-latency networks, but we shouldn’t hold our breath for OEMs flooding the show with their next generation 5G smartphones. There will be a few 5G device unveilings for sure, alongside several early concept models that will be commercially available later in the year, but it’s important to realize that this is not going to be the year of 5G phones, or at least not until towards the end of the year.
The mobile industry has been putting too much hope into 5G overturning the downward momentum in mobile device sales. While this may be what happens in the long-term, it cannot happen until 5G services take off (read more: 9
Ways 5G Will and Won’t Impact the Future). A recent NPD Connected Intelligence survey of U.S. smartphone owners revealed that one-third of those surveyed plan to purchase a 5G-enabled smartphone when it becomes available. And this group has yet to see a 5G smartphone form factor, which will probably be bulkier than the typical flagship device, due to extra battery and antenna requirements, not to mention more expensive due to economies of scale.
Nevertheless, there will still be a lot to get excited about at the show. Almost all major device OEMs will be launching their latest flagship models featuring advanced technologies (with or without 5G). Samsung, which dominated the previous MWC shows by making the venue its launch pad for the latest additions to the Galaxy S franchise, debuted its smartphones this week in San Francisco including a series of new Galaxy S models (the S10, S10+ and S10E) alongside the much-anticipated foldable display phone, the Galaxy Fold. This was a strategic move as it allowed Samsung to enjoy the tech world’s full attention without distractions from other brands. This means that smaller OEMs, including Xiaomi, Vivo, Oppo, and OnePlus, will have the opportunity to take more of the limelight than in years past. These OEMs are planning to show off their latest flagship devices that will be on par with most of the tier-1 OEM flagships. As an example, Vivo will be showcasing a concept model, the APEX 2019, that comes with no external output for audio or charging.
In a market where tier-1 flagship prices start at $900, spec-rich, yet cost-effective hardware solutions have started becoming an important alternative for consumers seeking value and innovation. Luckily for these emerging OEMs, carrier distribution is not a must-have to enjoy a successful penetration. NPD’s Connected Intelligence estimates that unlocked smartphones account for close to one fifth (18
percent to be exact) of all smartphones actively running on U.S. mobile networks as of the end of 2018. This is a big jump from only 12 percent at the end of 2016 and, thanks to aggressive efforts by retailers and direct marketing by OEMs, over three quarters of U.S. customers are aware of the unlocked smartphone notion.
The good news for the OEMs is that U.S. carriers also enjoy the boost in unlocked adoption because more BYOD (Bring Your Own Device) activations mean less device financing on their end since U.S. consumers are accustomed to paying for their expensive phones in monthly installments financed by the carrier. OnePlus has set an excellent example for all these emerging OEMs by penetrating the market as an unlocked vendor and gradually securing carrier distribution (with T-Mobile). This is a great time for all new vendors charging full throttle into the U.S. as the market needs more diversity, which fosters all players to keep innovating while pressuring them to be more competitive on pricing.