5G Analysts scramble to revise their 5G market projections for 2020
2020 was supposed to be the year that 5G would truly take hold. According to industry analysts who are scrambling to revise their market projections, this is no longer the case.
This is because of the novel coronavirus, which has thrown a spanner into the works and has turned the world on its head. One market that has been heavily disrupted is 5G, which in many cases has faced a total stop to trials and testing for the foreseeable future, or at least severe delays.
Due to the disruption caused, many analysts are now expecting a delay in 5G network installations by as many as three to six months due to the slowing down of 5G network infrastructure supply chains. Meanwhile, the 3rd Generation Partnership Project (3GPP)—an umbrella for a number of standards organizations that develop mobile telecommunications projects—has been forced to delay the ironing out of some important additional 5G specifications. This is because the organization has had to cancel face-to-face meetings due to COVID-19.
Now, analysts are beginning to look at their projections amid a potential 30 percent fall in shipments of 5G-enabled smartphones. This is not helped by the fears of market observers, many of whom fear that Apple may postpone the launch of its flagship 5G smartphone which was originally scheduled for September.
According to ABI research, the impact of the pandemic on the mobile communications sector could mean that cloud revenues from 5G cloud deployments could fall between 20 percent to 30 percent short of previous US$9 billion forecasts for 2020. The sector is being particularly challenged by the need for site engineers and technicians to follow strict distancing guidelines, something which is slowing infrastructure supply chains. Dimitri Mavrakis, ABI’s 5G research director, believes that this could add at least 3 months’ worth of delays to the process.
Other COVID-related troubles for the market include the lockdown, something which has forced consumers to question whether 5G is actually necessary. Existing networks are coping relatively well with the increase in demand. However, as readers familiar with the market will know, 5G primarily targets outdoor coverage. At the moment, most of us are indoors. As for 5G-enabled smartphones, there will be a shortfall in both supply and demand for now. Once business resumes and the big retail outlets open back up, where the majority of upgrades and new subscriptions and purchases are made, it is expected that there will be a big surge in demand.
Just a few months ago, 2020 was destined to be the year that 5G would start making a huge impact and start paying dividends to investors. Unfortunately, this seems to no longer be the case and analysts are now recasting their projections and promoting 2021 as the “Year of 5G.”