5G Adoption to Surge as 5G Smartphones Proliferate and Prices Tumble

• Strong momentum in China will push worldwide 5G connections to 3.6 billion in 2025.
• In 2020, 260 million 5G-enabled smartphones will be sold worldwide.
• The arrival of 5G-enabled iPhones will boost adoption, particularly in Europe and North America.
• CCS Insight survey suggests Covid-19 has blunted interest in some of the benefits of 5G networks.

London, 13 October 2020: With the world recently passing 100 commercial 5G networks, the shift to the new technology is poised to accelerate now that 5G smartphones are abundant and cost significantly less than widely expected a year ago. By the end of 2020, there will be nearly a quarter of a billion 5G connections worldwide, and this number is on track to more than triple in 2021. This is one of the leading findings revealed in a new, more positive forecast from technology analysis firm CCS Insight, supported by an expansive user survey carried out by the company.

China is the main market where 5G adoption is defying previous expectations, with well over half of new smartphones sold in the past three months featuring support for 5G, thanks to strong promotion by the three main mobile operators in the country.

“Ironically, the weak overall demand for smartphones worldwide has been one of the triggers for 5G’s success”, observed Marina Koytcheva, vice president of forecasting at CCS Insight. Global sales of mobile phones in 2020 are expected to be 1.54 billion units, 15% lower than in 2019 owing to the global Covid-19 pandemic. “This has sparked intense competition among manufacturers to get their 5G-enabled phones into the hands of consumers. Prices of phones featuring the latest 5G technology have slid rapidly, with devices from prominent brands already reaching £299 or €349 in Europe. We expect prices to drop further before the end of the year”, continued Koytcheva.

All these factors have fuelled momentum in China, with projections for more than 170 million phones to be connected to 5G networks by the end of 2020.

South Korea remains the leading market for 5G adoption based on the proportion of connections, reaching 12% in August 2020. About a third of all mobile data traffic is now on 5G networks as operators continue to develop new applications for 5G and promote upgrades through attractive pricing.

In contrast, major markets in Western Europe and North America have been held back by the lack of 5G-enabled iPhones, despite the fact that mobile operators have managed to continue network roll-outs during the pandemic. The debut this week of new 5G-ready iPhone models will deliver a major boost to adoption of the technology in markets where Apple traditionally commands a significant market share.

The increase in our forecast for 5G connections overcomes mixed perceptions of 5G technology, highlighted by our recent survey of more than 2,000 mobile phone users in the UK and US. Among people who have yet to take 5G, 44% in the UK and 29% in the US said they do not need this latest technology. Disappointingly, this was higher than when we asked the same question a year ago.

Kester Mann, director of consumer and connectivity at CCS Insight, believes the trend reflects restrictions on movement during pandemic lockdowns that could have quashed people’s hunger for a high-speed mobile service. “In the short term, keen pricing and an abundance of device choice will ensure 5G finds the consumer without radically new uses for the technology”, he said. But Mann cautioned that the survey results expose a need to better explain the lasting benefits of 5G. “This is a wake-up call for the industry. Customers need more help to understand how 5G can help them and to overcome some of the clear misconceptions that our research highlighted”.

Paradoxically, another challenge to adoption of 5G connectivity is that people’s satisfaction with their existing 4G service remains strong, according to the survey. This is one of the reasons why only about a fifth of respondents who have yet to sign up to 5G said they would be prepared to spend more to get it.

CCS Insight’s research also showed that faster download speeds is the top reason that could convince people to sign up to 5G. This finding should encourage an industry that has placed speed at the heart of many 5G campaigns, like Apple’s event teaser for the hotly anticipated 5G iPhone launch today, which has the strapline “Hi, Speed”.

However, even if people don’t actively look for 5G, the new phones they will buy over the next months and years are increasingly likely to be 5G-enabled: 60% of all phones sold in in Western Europe and North America in 2021 are expected to support 5G connectivity, growing to 85% in 2024.

Globally, 260 million 5G mobile phones will be sold in 2020, jumping to 630 million in 2021. But mobile phones aren’t the only devices that can connect to 5G networks; we expect to see tablets, laptops, MiFis and other devices shipped too. Our survey uncovered strong and growing interest to connect non-smartphone devices to 5G networks in the future, an encouraging sign as cellular variants of laptops and tablets have traditionally struggled to excite consumers.

However, industrial usage of 5G to connect the Internet of things has been delayed by the Covid-19 pandemic. China is a notable exception, where the government and all major players are determined to exploit the benefits of the new cellular technology quickly and fully. Still, Internet of things connections will represent just 7% of all 5G connections worldwide at the end of 2025.

A summary of CCS Insight’s new forecast for 5G connections is presented in the chart below.

Our latest projections for 5G-enabled mobile phones were published earlier in September, and the below chart offers a snapshot.

Details of CCS Insight’s consumer research into attitudes, intentions and early customer experiences with 5G are available on request.

More details of CCS Insight’s extensive 5G service can be found at: https://www.ccsinsight.com/research-areas/5g-networks

Notes to editors

CCS Insight is a leading provider of research about mobile phones and 5G. This forecast is part of a broader suite of research into these areas, including consumer surveys, regular reports and updates on the latest announcements, events and news.

About CCS Insight

CCS Insight is a global analyst company focussing on current and future trends in technology. It provides comprehensive services that are tailored to meet the needs of individual clients, helping them make sense of the connected world. Follow @CCSInsight on Twitter or learn more at www.ccsinsight.com.

For further information contact:
Emily Ackland
Harvard PR
Tel: + 44 (0) 7393 758442
E-mail: ccsinsight@harvard.co.uk