5G Preheated... This Year Marks the Start of the Smartphone 'Supercycle'

[Asia Economy Reporter Seulgina Jo] In the second year of 5G commercialization, this year is expected to mark the full-scale start of the smartphone 'super cycle' led by 5G. Following Samsung Electronics' Unpacked event held on the 11th (local time) in San Francisco, USA, Huawei, Apple, Xiaomi, and others have announced plans to release 5G devices one after another. Compared to last year, more than 20 models?over three times as many?are expected to be introduced. However, the recent spread of the novel coronavirus infection originating from China (Wuhan pneumonia) is considered a variable.

◆ Continuous Releases... Expanding the 5G Smartphone Market= According to industry sources on the 10th, smartphone manufacturers such as Samsung Electronics and LG Electronics are estimated to release more than 20 5G devices this year. This is about three times the number of 5G-based devices (7 models) released last year.

Samsung Electronics will simultaneously unveil the Galaxy S20 series, its first premium 5G model of the year, and the foldable phone 'Galaxy Z Flip' at this Unpacked event. Xiaomi from China, focusing on mid- to low-priced products, has announced the upcoming release of the 'Mi 10.' Xiaomi plans to launch more than 10 5G devices throughout the year. Chinese company ZTE and Japan's Sony are also expected to introduce flagship 5G smartphones around the end of this month.

Above all, Apple's first 5G smartphone, expected in the second half of the year, is seen as a turning point that could revive the global smartphone market, which has been declining. Morgan Stanley previously raised Apple's target stock price per share, citing smartphone replacement driven by 5G as a reason.

In addition to flagship models, mid- to low-priced entry-level models will also be released continuously, which is expected to further lower the price range of 5G devices. Market research firm IDC anticipates that the rapid price decline of 5G smartphones this year will stimulate device sales. An industry insider evaluated, "If last year was the first year of 5G, this year is the first year the super cycle begins," adding, "The release of 5G devices at various price points is significant as it leads to an expansion of the 5G smartphone demand base."

◆ 5G Acceleration... Sales Share Expected to Exceed 50% by 2023= The expansion of 5G worldwide this year, which was limited to some countries like Korea in its first year of commercialization last year, also supports expectations for the 5G smartphone super cycle. Mike Dano, a 5G and mobile strategist at Light Reading, explained, "The smartphone market this year appears ready for a '5G-driven sales surge,'" adding, "This super cycle breaks away from the traditional pattern of 'my device is old or broken'." He explained that the trend of purchasing decisions based solely on technological innovations such as design and speed, regardless of device replacement timing, is expanding.

Market research firm Gartner estimated in a report released last month that global 5G device sales will surpass 221 million units this year and reach 489 million units next year. Considering last year's estimated sales of 11 to 18 million units, this represents rapid growth. The share of 5G devices in total smartphone sales is expected to rise from 12% this year to 43% in 2022.

By 2023, it is forecasted that more than 50% of shipments will be 5G-based. Annette Zimmermann, Vice President at Gartner, said, "As 5G commercialization accelerates, smartphone sales will also increase," adding, "Market rebound is expected as more countries adopt 5G networks."

However, the possibility that the novel coronavirus could adversely affect the smartphone supply chain cannot be ruled out. A telecommunications industry official stated, "China, which has virtually come to a halt due to the novel coronavirus, is the world's largest smartphone producer and consumer," adding, "Most major smartphone companies such as Apple and Huawei have manufacturing plants in China, so it will be difficult to avoid negative impacts caused by the novel coronavirus."

This content was produced with the assistance of AI translation services.