Game on for Chi­nese 5G firms

China Daily (Latin America Weekly) - - 12 Business -

It’s a high-stakes high-tech race. Bil­lions, maybe, tril­lions of dol­lars are up for grabs glob­ally — and Chi­nese tech­nol­ogy com­pa­nies are vy­ing to scoop up as much of the fifth-gen­er­a­tion or 5G mo­bile telecom­mu­ni­ca­tion tech­nol­ogy pie as pos­si­ble, as the D-Day of com­mer­cial launch around 2020 nears.

In do­ing so, they are also seek­ing the honor of be­ing re­mem­bered as the first off the block, in the process gen­er­at­ing mirth at times.

On Nov 30, about 10 engi­neers em­ployed with smart­phone maker Oppo and based in China, Ja­pan and the United States made what they claimed is the world’s first 5G-en­abled cross-con­ti­nent video call.

Their call was through WeChat, the most pop­u­lar mes­sag­ing and so­cial-me­dia app in China. They used Oppo’s 5G pro­to­type smart­phones to make the 17-minute call un­der the trial 5G net­work band­width of 100 megabits per sec­ond.

A day ear­lier, Chi­nese smart­phone ven­dor Vivo demon­strated its 5G pro­to­type hand­set to the pub­lic for trial use in Bei­jing. Ar­guably, Vivo’s is the first such move in the in­dus­try. Us­ing a Vivo de­vice on a trial 5G net­work, con­sumers were able to surf the in­ter­net.

In the first week of De­cem­ber, Lin Bin, pres­i­dent of Xiaomi Corp, posted a mes­sage on Weibo, China’s Twit­ter-like plat­form, and claimed it could well be “the first Weibo post en­abled by 5G net­work”. Lin, of course, used Xiaomi’s 5G-ready smart­phone.

Chi­nese smart­phone makers’ re­search and devel­op­ment of 5G smart­phones is hap­pen­ing at a time when large-scale com­mer­cial de­ploy­ment of 5G net­works is one or two years away. Com­pa­nies are work­ing hard to bring 5G smart­phones to the mar­ket as soon as pos­si­ble, with some eye­ing the first half of 2019 for the ear­li­est launch.

“They are bet­ting on the new-gen­er­a­tion of mo­bile com­mu­ni­ca­tion tech­nol­ogy to cope with a year-long down­ward spi­ral in global smart­phone ship­ments, and more im­por­tantly, to pre­pare for a promis­ing fu­ture where 5G de­vices will en­able a slate of new ap­pli­ca­tions,” said James Yan, re­search di­rec­tor at Coun­ter­point Tech­nol­ogy Mar­ket Re­search. “5G is a once-in-a-decade op­por­tu­nity for smart­phone makers.”

The next-gen data tech will be at least 10 times faster than 4G and will sup­port su­per­fast movie down­loads. Down­load­ing an 8-gi­ga­byte con­tent might take no more than a few sec­onds, said ex­perts.

5G also has the po­ten­tial to rad­i­cally al­ter how the world’s best smart­phones are used ev­ery day.

“Think aug­mented re­al­ity (com­puter graph­ics merg­ing with the real world, such as fight­ing against a 3-D-di­na­sour in users’ liv­ing room), vir­tual re­al­ity, im­proved streaming res­o­lu­tions, holo­graphic dis­plays, en­hanced power and nextgen cloud com­put­ing,” said Ni­cole Peng, se­nior di­rec­tor of mar­ket re­search com­pany Canalys.

Though some of these ini­tial ap­pli­ca­tions are pos­si­ble in 4G, “it is 5G that is go­ing to be a sig­nif­i­cant jump for­ward for phones be­cause only with the lat­ter’s higher band­width that these ap­pli­ca­tions can be more so­phis­ti­cated and adopted by most con­sumers, de­liv­er­ing real amaz­ing im­pact,” Peng said.

The mount­ing en­thu­si­asm for 5G hand­sets came as the global smart­phone in­dus­try has been on the de­cline for six straight quar­ters due to mar­ket sat­u­ra­tion.

In the third quar­ter of 2018, world­wide smart­phone ship­ments fell by 3 per­cent year-on-year to 386.9 mil­lion units, data from the Coun­ter­point Tech­nol­ogy Mar­ket Re­search showed.

But the ad­vent of 5G smart­phones is ex­pected to in­ject new vi­tal­ity into the sec­tor. Ac­cord­ing to a re­port by the Coun­ter­point, global 5G smart­phone ship­ments are ex­pected to reach 108.2 mil­lion units in 2021, up an es­ti­mated 255 per­cent year-onyear, par­tially off­set­ting the con­tin­ued shrink­ing of 4G hand­set vol­umes.

To pounce on the promis­ing op­por­tu­ni­ties. Chi­nese smart­phone makers in­clud­ing Huawei Technologies Co Ltd, Xiaomi, Vivo, Oppo, Len­ovo, OnePlus, and ZTE Corp are all aim­ing to launch 5G smart­phones in 2019. They are ac­cel­er­at­ing rel­e­vant R&D ef­forts.

Wal­ter Ji, pres­i­dent of Huawei’s West­ern Euro­pean Con­sumer Busi­ness Group, said in an in­ter­view with the tele­com web­site T3 in July that the com­pany will bring 5G smart­phones into the mar­ket ei­ther in its P se­ries mod­els in March 2019 or in its Mate se­ries in Septem­ber 2019.

“Now, the size of the (5G) chipset is not small enough to be used, to be in­te­grated in a smart­phone,” Ji said, Source: Coun­ter­point Tech­nol­ogy

Mar­ket Re­search adding (5G would fea­ture) “if not in the P30, then for sure in the Mate se­ries next Septem­ber”.

The world’s sec­ond-largest smart­phone ven­dor — only Sam­sung Elec­tron­ics Co Ltd is ahead of Huawei — in­vested $15 bil­lion to $20 bil­lion in R&D this year. It first beat Ap­ple Inc in terms of smart­phone ship­ments in the sec­ond quar­ter of 2018 and main­tained its lead in the third quar­ter.

“Huawei’s edge lies in its full 5G-prod­uct lineup, in­clud­ing chips, tele­com equip­ment and smart­phones. Un­like its ri­vals which rely on Qual­comm Inc for 5G chipsets, Huawei’s abil­ity to de­velop in-house 5G chipsets gives it an ob­vi­ous up­per hand,” said Xiang Li­gang, CEO of tele­coms in­dus­try web­site Cc­time.

Chen Mingy­ong, CEO of Oppo, said in Novem­ber that “5G is a trend that we must catch. In ad­di­tion to be­ing among the first batch of play­ers to un­veil 5G smart­phones, Oppo will step up the ex­plo­ration of ap­pli­ca­tion sce­nar­ios of next-gen de­vices, which will ul­ti­mately play a role in de­cid­ing the true value of the su­per­fast tech­nol­ogy”.

Ac­cord­ing to him, the com­pany will up its R&D in­vest­ment to 10 bil­lion yuan ($1.45 bil­lion) next year from 4 bil­lion yuan this year. As of Septem­ber, Oppo filed about 22,712 patent ap­pli­ca­tions, with ar­ti­fi­cial in­tel­li­gence patents ex­ceed­ing 300.

De­spite heavy in­vest­ments by smart­phone ven­dors, 5G growth in the early com­mer­cial phase is ex­pected to be low due to sev­eral fac­tors, said some an­a­lysts.

“There are still for­ward-look­ing 5G stan­dards that are un­con­firmed, cre­at­ing un­cer­tainty around prod­uct and ser­vice op­por­tu­ni­ties. We also ex­pect 5G chips to have a higher price point which will ini­tially drive the cost of de­vices up. 5G ca­pa­ble de­vices will be premium only in the be­gin­ning,” said Tom Kang, re­search di­rec­tor of Coun­ter­point, in an in­dus­try re­port.

But once bet­ter 5G busi­ness cases and in­fra­struc­ture are es­tab­lished, the smart­phone mar­ket will be­gin see­ing higher sales over­all with more con­tri­bu­tion from 5G smart­phones, Kang said.

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