This report looks at the adoption rates of smartphones, smart speakers, and personal computing devices and looked in detail at consumer expectations around 5G and their willingness to upgrade to 5G services.
It suggests that smartphones remain the dominant form factor, despite a plethora of new products, while the promise of the smart home may finally be within reach due in no small part to the growth in smart speakers. In what is a very fragmented market, the smart home has been held back by a lack of compatibility, according to the report. But it suggests that smart speakers could change this by acting as a single control point with a sophisticated AI-based voice engine.
Falls in price, which have been led by Amazon’s Echo devices, have also helped increase take-up, which is up by as much as 10 per cent over the past year, making smart speakers the fastest moving category in 2019.
When it comes to 5G the report says that it is set to provide a boost to smartphone sales, rather than generate a wholescale renewal of the market.
Consumer awareness of 5G is uniformly high at 75% across the 21 countries that were surveyed, however, upgrade intentions vary considerably. Nearly 50% of Chinese consumers say they will get a 5G phone as soon as the service becomes available, compared to 30% in the US and just 15–20% in Europe. For many 5G is still seen as being solely about speed enhancement.
For many companies market saturation has been a real problem, as is what the report calls ‘design fatigue.” So for many the arrival of 5G can’t come soon enough.
China, South Korea and a collection of Middle Eastern states offer the likeliest early adopters.
Amongst handset manufacturers the report found what it described as a shift in the competitive balance.
While Samsung wants to establish a 5G first-mover advantage, upgrade intentions in its heartland markets are uncertain, while Apple has elected to come late to the game and faces on-going price pressure against its premium product ethos.
For both Samsung and Apple, Huawei is becoming an increasing threat with a strong market position in China as well as an expanded presence in both Europe and the Middle East, which should serve as a ‘stark warning’ to both companies should Huawei choose to leverage its vast scale economies and take an aggressive pricing approach to 5G handsets. According to the report both Huawei and Xiaomi are now looking to compete on features rather than price alone to establish 5G first-mover advantage.
China holds a commanding lead over other advanced nations such as the US. With 50 per cent of Chinese consumers saying they will get a 5G phone as soon as it is available, China is set to vastly outweigh any other country in the early years of 5G take-up.
There is also growing evidence that handset prices are falling faster than initially thought, which will accelerate as chipmakers such as Qualcomm and MediaTek service the mid end in 2020. However, the report goes on to warn that if 5G smartphones are priced at only a small premium to 4G devices, questions of functionality trade-off may arise as well as whether services are ‘true’ 5G or just enhanced 4G.
In the light of these finding it is no surprise that China has become the global epicentre for smartphone manufacturing and consumption, accounting for 75% of production and 30% of sales.
The report says that market saturation and weakness in consumer incomes has resulted in a two-year global smartphone sales downturn, but that the trend over the last six months gives grounds for cautious optimism among OEMs as 5G arrives.
