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Telcos are pinning their hopes on Apple and its new iPhone 12 to drive the long-promised shift to 5G, after slow adoption of the new networks among consumers over the past 18 months.
Apple gave the highest billing to 5G on Tuesday’s iPhone 12 launch, marking a stronger push for networking technology by the Silicon Valley company than in any previous transition in mobile infrastructure.
“It is a turning point for 5G,” said Marc Allera, CEO of BT Consumer.
The “fifth generation” of wireless cellular telephony was launched with great fanfare last year, initially in the United States and South Korea, and operators in markets such as the United Kingdom and Germany quickly followed suit.
Operators claim that 5G can offer download speeds up to 20 times faster than existing 4G networks, although coverage remains limited for now.
However, the new network has generated more interest in the business and industrial market than among consumers. Analysts at research firms Canalys and IDC estimate that only 13 percent of smartphones shipped globally in the first half of 2020 were 5G compatible.
Although Samsung and LG launched their first 5G phones in mid-2019, carriers say neither has offered the allure of a new iPhone. While the iPhone 12’s features may not offer anything radically different from previous devices, they believe Apple’s marketing power and loyal customers will make a stronger case for 5G.
South Korea launched the world’s first comprehensive 5G mobile networks in April 2019 © Jung Yeon-Je / AFP / Getty
“The iPhone is more important than any device, even though we already have great devices from Samsung and others,” said Johan Wibergh, CTO of Vodafone, which has launched 5G in seven European markets.
Allera, whose EE brand launched 5G networks in the UK 18 months ago, argued that Apple had a strong track record in promoting growth in technology categories, including touchscreen phones, smartwatches and the app market, despite that other companies already offer those services. “They will blow it up,” he said.
Waiting for the ‘killer app’
According to the mobile commerce body GSMA, operators are expected to spend 80 percent of their mobile capital spending, or nearly $ 890 billion, on 5G networks over the next five years, driving 1.8 billion 5G connections to 2025.
5G promises faster download speeds and lower latency, opening the door to entirely new types of applications, from driverless cars to holographic video calling.
However, telecom executives admit that even with the launch of Apple’s 5G-enabled iPhone, there is still no “killer app” that will immediately transform the way consumers use their smartphones.
The launch of global 5G networks has coincided with increased pressure from US authorities on governments around the world to ban Huawei, the world’s largest provider of telecommunications equipment. That has stalled progress in some markets, including the UK, as telcos have had to reverse their plans and react to new laws on high-risk providers.
Meanwhile, the massive amount of capital required for 5G and the collapse in share prices of some of the major players in the industry have put pressure on telcos to justify the outlay.
In Europe, just under 2 million 5G devices were sold in July, according to Jan Stryjak of Counterpoint Research. That’s a higher portion of total smartphone sales than at the beginning of the year, but, at just 11 percent, sales are “still a long way from what is expected of a technology that has been around for more than a year. year in many markets. ” , he said.
The pandemic has kept consumers more at home this year, where they can use their own WiFi networks, and away from downtown areas that often have the best 5G coverage.
The Apple iPhone 12 Pro and iPhone 12 Pro Max are unveiled during a virtual product launch Tuesday © Daniel Acker / Bloomberg
But Stryjak said the main reason for slow 5G device sales was a “shortage” of good devices.
Carriers now expect the iPhone 12 launch to drive rapid 5G adoption at a faster rate than previous generations. “It’s clearly a trigger for bigger updates,” Wibergh said.
They are also offering consumers generous incentives to trade. In the US, AT&T is offering grants worth hundreds of dollars in one of the largest promotions of its kind in recent years.
‘The iPhone won’t change the world immediately’
Apple hasn’t always relied heavily on iPhone marketing for the networking technology that underpins its products.
When it introduced the first iPhone in 2007, it wasn’t even 3G compatible, five years after Nokia introduced its first device to use what was then the fastest network available.
This week, Apple’s presentation targeted mobile gaming as a key use case for 5G, introducing a new iPhone version of the popular multiplayer game. League of Legends. But discussions over App Store trade terms have prevented new game streaming services like Microsoft’s xCloud, Google’s Stadia, and Facebook Gaming from launching on the iPhone until now, potentially limiting the new device’s appeal between. Players.
Another selling point touted by Apple was the iPhone 12 Pro’s ability to record, edit, view and share high-quality video footage using the new Dolby Vision HDR format. However, it chose to illustrate this feature with footage of professional filmmakers filming wild horses in a desert environment, far from the densely populated urban areas where operators are rolling out their first 5G networks today.
In fact, some analysts questioned whether Apple lived up to the expectations of operators by convincing consumers of the real benefits of 5G.
“New and better cameras are great, but the real 5G cycle is at least a year or two away,” said Craig Moffett, senior analyst at MoffettNathanson.
“The iPhone won’t change the world right away,” Wibergh said. But he argued that the benefits of the introduction of 5G will be apparent for a longer period. “We tend [in telecoms] making excessive promises in the short term and underestimating the long-term impact, ”he said.
Apple will now look to app developers to produce novel experiences, such as augmented reality games, that can take full advantage of 5G.
“Apple will do more for 5G than 5G will do for new iPhones,” said Thomas Husson of Forrester Research.
