Deloitte predicts 50k 5G smartphone in the UK by 2019-end

While the vast majority will have to wait some time before experiencing the euphoria of an extra ‘G’ Deloitte is predicting there will 50,000 early adopters in the UK.

After several years of slugging, the glorious 5G world is upon us. First in the US and South Korea, though pockets are starting to emerge everywhere else as well. San Marino is live while it won’t be long before countries like China and Japan start hitting the green button.

“The introduction of 5G handsets expected this year will look a lot like 2010, when 4G phones first entered the market,” said Dan Adams, Head of Telecommunications at Deloitte.

“There will be a lot of noise in the first year from vendors vying to be first to market, and relatively little action from consumers. We’re not talking about an overnight switch to faster connectivity with lower latency, we will see 5G used by consumers in hotspot locations in the next two to three years, with mass adoption by 2025.”

The first devices are likely to be with us in Q2, though this year’s Mobile World Congress will almost certainly be a shouting contest between the main smartphone manufacturers. It’s already rumoured Samsung will be launching a foldable-phone (albeit not 5G) prior to the event, while LG and Motorola are also in the running to produce a 5G compatible phone.

In total, Deloitte predicts roughly 20 handset brands will launch 5G-ready handsets across 2019, with shipments totalling one million. This is still a tiny fraction of the 1.5 billion smartphones which will be sold through the year, though 50,000 of them could be heading to the UK.

Looking at the networks, there might not be much to choose from across the UK. EE has confirmed it will launch 5G across 16 cities in 2019, though these will only be in the busiest locations. Vodafone will also launch this year, though it is being coy as to when. Three is telling the same story, while O2 has confirmed its customers will have to wait until 2020. One thing is clear, these will be incredibly limited deployments and it will be years until coverage reaches what the demanding user would consider adequate.

Whether this justifies the hype, or the extortionate amount handset manufacturers will inevitably charge the glory-seekers for the new devices, we’ll leave you to decide, but it will take years for the devices to be considered mainstream. Deloitte expects worldwide 5G smartphone sales to represent 1% of the total smartphone sales by the end of 2020, with 2-3 million Brits getting their hands on the devices. As Adams points out above, 2025 is when the team expect 5G devices to hit mass adoption.

Another interesting growth area the Deloitte team is keeping an eye on is the smart speakers segment.

“Smart speaker adoption has seen phenomenal growth in recent years,” said Paul Lee, Global Head of Research for TMT at Deloitte

“With improvements continuing to be made, demand for smart speakers could be in the many billions of units, possibly even higher than for smartphones. In the future, smart speakers have the potential to be installed in every room in a house, hotel, office, school and even beside every hospital bed.”

Smart speakers are the flashy product which will attract a lot of the consumer market, but the power of the virtual assistants is what could take the segment to the next level. We’ve long anticipated the breakthrough of artificial intelligence in the workplace, but perhaps the slightly sluggish resistance has been down to the delivery model of the applications.

Should smart speakers be adopted in hotel rooms, hospitals and offices in the way which Deloitte anticipates, the world is opened up for industry specific applications of virtual assistants. One area which might help this adoption is the price point.

While smart speakers were initially an expensive appliance for the home, the normalisation of the product in the eyes of the consumer has peaked the interest of traditional consumer electronics manufacturers. With more manufacturers, including those with the ability to produce goods at greater scale, entering the fray competition will increase, bringing prices down, while advertising will also grow, fuelling interest in the bellies of the consumer.

Deloitte anticipates the marker for internet-connected speakers with integrated digital assistants will be increase to £5.6 billion in 2019, selling 164 million units at an average selling price of £34. This would represent a 63% growth rate, making smart speakers the fastest-growing connected device category worldwide, leading to an installation base of more than 250 million units by the end of the year.

This is a price point which would make enterprise adoption of the devices more interesting, and as time moves on, it will get cheaper. The increased introduction of industry-specific virtual assistant and AI applications will certainly help this segment also.

After years of promises and false-dawns, 2019 might prove to be a blockbuster year after all. There’s still a lot which could go wrong, but here’s to hoping.

Infographic: Who do Telecoms.com readers think is winning the 5G race?

Last week, research from Deloitte placed China at the front of the pack in the race for the 5G dream, so we asked Telecoms.com readers in a snap poll who they thought was winning.

Deloitte’s reasoning was built on the progress of network densification programmes across the country, its throwing sites up all over the place, and also future investment allocations. It seems Telecoms.com readers agree with the consultancy as well.

We suspect the ‘someone else’ option was directed at a European nation, though considering only 6% decided to select this one, it is not looking good for the continent.

5G Leadership Infographic

 

China is clear leader in the 5G race – Deloitte

Consulting firm Deloitte claims China has taken pole position in the 5G race, owing to a continued focus on network infrastructure and future investments which are matched by no other nation.

While US telcos are galloping towards 5G for the bragging rights in advertising campaigns, the technology presents so much more than an ego boost for national economies. The US can partially thank its leadership position in the global economy today to the telecommunications industry and the efforts to rollout 4G. It created a test bed for innovative mobile, social, and streaming applications which have dominated revenues in the digital economy. The same prospects can be said for the 5G world, just bigger.

“The United States, Japan, and South Korea have all made significant strides toward 5G readiness, but none to the same extent as China,” the report states. “Infrastructure spend and tower density distinguish China’s leap forward and highlight the degree to which China outpaces the United States during these early stages of 5G deployment.”

The network densification project is going to be critical for every nation, and China does not seem to be waiting around. China Tower, which owns roughly 96% of macro towers, small cells, and DAS sites in China, has invested $17.7 billion in capital and added more than 350,000 sites since 2015. The company has roughly 1.9 million wireless sites, compared to approximately 200,000 across the US. Across the last three years, US tower companies and telcos added fewer sites than China Tower did in a three month period in 2017, as the company added 460 sites a day to the Chinese landscape.

While China is streaking ahead of the US in terms of network rollout, it looks like there are also several other nations who are in a more comfortable position also. In terms of the number of sites per 10,000 citizens, Deloitte estimates this number at 4.7 in the US, though this is eclipsed by China (14.1), Germany (8.7) and Japan (17.4). Looking at the average number of sites per ten square miles, US stands at 0.4, while China has 5.3, Germany has 5.1 and Japan has 15.2.

The US telcos might be bragging about getting to launch commercial 5G services first, but this means very little. Having several pockets of 5G coverage scattered over the US, focused around the cities which house telco HQs is not the same as taking a leadership position in the 5G economy. When it comes to network densification investments, a key factor for the success of the technology, China does seem to be taking the lead.

Passwords about to become a thing of the past – Deloitte

New research from Deloitte has pointed the finger at biometrics for one of the big trends of 2018 as we start to forget our passwords.

The firm estimates that 15 million UK consumers now have a smartphone that incorporates a fingerprint scanner, roughly 36% of the user base, with 79% of this group actually using it. Should the numbers prove to be accurate, the convenience and speed has seemingly overridden the fear of the new, which is usually a notable barrier for most technology to overcome. The most common biometric application, at 96%, was to unlock the phone

“Most smartphone owners use biometric authentication because it is faster and more secure than traditional methods,” said Paul Lee, Head of Research for Technology, Media and Telecoms at Deloitte. “Passwords have to be ever longer and more complex in order to be secure, which makes them hard to remember.

“For the modern day smartphone user, a quick scan of a thumb is faster and just as secure, if not more so – and fingerprints are not forgettable. We estimate that currently, globally, well over a billion devices now include a fingerprint reader.”

However, while the fingerprint has been accepted as a means to unlock features alterative biometric technologies, such as voice, facial and iris recognition, are less used. The research showed only 3% of the UK population are making use of these features. This might seem like a surprisingly low statistic, but perhaps this is one which is going to surge over the short-term. After all, the idea of biometrics has seemingly been normalised by the fingerprint scanner.

To correct this is perhaps nothing more than an education exercise from the handset manufacturers, as facial recognition is more secure than fingerprint scanners. Or maybe it is simply down to the features available on the smartphones themselves. As more phones get launched across 2018, fingerprint scanners and facial recognition software will become a standard feature, therefore by just being available they will be used more.

“By the end of 2018, it is likely that 3D facial recognition will be used more frequently than fingerprint scanners in smartphones,” said Lee. “We expect that individual usage of 3D facial recognition sensors will be over 100 times daily on average.”

For the moment this is a very basic use of the technology, mostly limited to accessing devices. There are a few companies out there who are trying to integrate biometrics into everyday activities, Vodafone is using voice recognition software as a means to identify and authenticate customers when they contact call centres, but this is still very much early days.

Deloitte is confident the technology will spread to areas such as finance before too long, but that is another hurdle which will have to be crossed. When it comes to money, people are generally very sceptical about new ideas, especially ones which haven’t been vigorously tested in other applications. Biometrics will play a strong role in finance in the near future, but there will have to be a bit more work done to convince the consumer before mass market penetration.