5G smartphones accounted for 2% of the market in Q3 2019

5G smartphones accounted for 2 percent of the market in Q3 2019, Counterpoint Research in its latest report said.
SK Telecom 5G powers TV broadcast in Korea
South Korea and United States have launched 5G services. China Mobile, China Unicom and China Telecom launched 5G services on Friday. 5G tariffs of China Mobile, China Unicom and China Telecom start at around 128 yuan or $18 per month.

5G services are now available in 50 Chinese cities, including Beijing, Shanghai, Guangzhou and Shenzhen. China will have 110 million 5G users in 2020, or 7 percent penetration versus 3 percent in South Korea now, Jefferies said.

China’s investment in 5G networks and the massive market scale will make 2020 the year for 5G. This should catalyze the slowing smartphone volume demand over the past couple of years and continue to boost the upward trend in the smartphone Average-Selling-Price (ASP), said Peter Richardson, research director at Counterpoint Research.

“The 5G rollouts from both networks and devices over the past twelve months have been faster than the 4G era, and we expect the rollouts to further accelerate going into 2020,” Peter Richardson said.

Linda Sui, director at Strategy Analytics, said: “Demand for smartphones is recovering, due to strong pricing competition among vendors and new innovations such as larger screens and 5G connectivity.”

Global smartphone shipments grew 2 percent annually from 359.8 million units in Q3 2018 to 366.3 million in Q3 2019. The global smartphone market grew for the first time since the third quarter of 2017.

Samsung shipped 78.9 million units in Q3 2019, up 11 percent from Q3 2018. Samsung has increased the number of the high-end models. The Note10 boasts two screen sizes for the first time, as well as separate 5G variants, which adds cost and complexity to Samsung.

“5G is the next battleground for Samsung. It is one of very few smartphone vendors to design its own chipsets and modems. It is not restricted to the innovation cycle of a third-party component supplier like Qualcomm,” said Rushabh Doshi, research director of Canalys.

If Samsung moves faster than Qualcomm, it can win the race to mid-range smartphones with 5G. Its recent announcement of the Galaxy A90 5G and the upcoming Exynos 980 chipset highlights its strategic priorities.

Canalys research analyst Vincent Thielke said Apple devices do not have 5G and it will have to contend with that in early 2020. “Apple will miss out on heavy operator investment in 5G marketing and promotions, and the expectation for Apple to launch 5G iPhones in September 2020 may convince some customers to delay purchasing.”

5G operators will need to convince users of the need to move to 5G. Some Chinese carriers have been offering discounts on certain devices to push consumers to upgrade to 5G network from 4G.

“Right now the launch in the consumer market is on a large scale, the sheer number of cities and amount of 5G sites rolled out is quite massive in terms of this scale. That itself will ensure the initial experience is good,” Vinod Nair, senior partner at advisory and investment firm Delta Partners, said.

Baburajan K