Although the promise of 5G may seem like old news, in reality it’s just starting to take off. Based on the amount of 5G hype that we’re seeing - we even watched a Super Bowl commercial about 5G - it’s clear that the major carriers are banking on this technology to have a positive effect on their bottom line.
Hype aside, it’s safe to say that 5G is poised to dramatically change the mobile market in 2020. The global market for new smartphone sales, which has been in a slump recently, is starting to see some movement. According to research firm Canalys, the market started to return to growth in late 2019 for the first time in two years. Our new research report, “5G Smartphone Upgrades and the Secondary Device Deluge” backs up this trend. We found that more than 50% of global consumers have been waiting for 5G networks and devices to become available before upgrading with nearly 25% of global consumers holding onto their old devices for more than a year in expectation of 5G.
After all of the hype on 5G, what real, tangible benefits will the market experience in 2020?
#1: THE RISE OF 5G
The widespread rollout of 5G and 5G-enabled services this year will power an increase in new device sales at the top end. 5G has been talked about for years, but by the end of 2020, 5G will prove that it’s not just something to discuss theoretically. What this means is that we should anticipate a tremendous number of used devices flooding the market as consumers capitalize on trade-in programs to receive credit towards their new 5G device. This is great news for mobile operators, OEMs and third-party logistics providers (3PLs) who stand to increase revenues due to the inherent value in used smartphones, a market that IDC estimates will be worth $67 billion by 2023.
#2: THE WEARABLES MARKET IS SET TO EXPLODE
The market for wearables such as wristbands, smart watches, and hearables (earbuds) will continue to expand in 2020, with the smartphone playing the role of “personal hub” for these devices. The wearables market exploded in late 2019, with global shipments totalling 84.5 million in Q3 – a year over year increase of nearly 95% according to IDC. Ignited by Google’s acquisition of Fitbit in 2019, we’ll see the wearables market go through further consolidation in 2020. Coinciding with more consumer access to 5G networks, I also believe we’ll also see accelerated maturity of wearables.
#3: DEVICE INSURANCE CARRIERS GAIN GROUND
Russ Ernst,
EVP, Products
& Technology,
Blancco
Mobile phone insurance carriers will provide a big boost to the secondary device market. Insurance providers provide services across all mobile carriers and are a conduit for used smartphones. When consumers place a claim, they turn in their devices and receive the same model in return. In the past, carriers controlled the flow of devices into and out of the market. Going forward, however, we can expect the role of mobile device insurance companies to gain ground in the secondary device market.
#4: AUTOMATIng the WAREHOUSE
Despite some very exciting advances in robotics and AI, the era of the fully automated warehouse is not imminent and there will still be high demand for humans in the warehouse in 2020. However, as mobile operators, 3PLs, mobile insurance providers and others grapple with the influx of used devices because of trade-ins for flashier 5G models, the use of robots and automation will continue to slowly expand in warehouses this year. Advances in machine-assisted automation will decrease training time for new warehouse operators while increasing overall warehouse efficiency. Companies will continue to need to hire and train personnel, and I predict there will be an increase in advanced software and more targeted hardware, but we are still years away from a completely automated warehouse. In a warehouse processing center for secondhand mobile devices, for example, where technological advances and automation have drastically reduced the entire diagnostics and erasure process, pallets of phones still must be physically sorted. At first look, a used device may appear brand new when, in reality, it could have been dropped in a bathtub or be infected with malware.
Although it’s been a rather lengthy hype cycle for 5G, the major carriers have done a good job of educating consumers about the benefits of 5G, why it matters and the inherent benefits it will bring. If predictions across the industry hold true, as 5G networks expand across the globe, the expansion will trigger a wave of new mobile device sales, benefiting companies up and down the mobile device supply chain.
