GSMA report: Sorry, handset makers, 5G is not going to save the smartphone market

Better LTE than ever, cos you'll prise my perfectly serviceable old mobe from my cold, dead hands, say respondents

A flurry of 5G-capable handsets have hit the shelves, giving punters an opportunity to transcend the limits of LTE data. But will they take the bait? According to the latest edition of the GSMA's The Future of Devices, probably not.

The trade body's research arm based the report on its 2019 Consumer Survey, which surveyed 38,000 respondents across 36 "key markets", and found there was a relatively lukewarm consumer appetite when it comes to upgrading to the latest cellular shiny. Across Europe, the US, and Australia, only 30-40 per cent of people said they intended to upgrade to a 5G-capable handset.

Of these, many were happy to wait for their existing contracts to expire, or didn't have any concrete ambitions to buy a new 5G phone as soon as the tech becomes available.

In the US, only 28 per cent of respondents said they planned to immediately upgrade to 5G. In France, that figure dropped to just 16 percent.

These findings corroborate a broader trend across the mobile industry, with users hanging on to their phones for increasingly long amounts of time.

Last year, Gartner warned that the global smartphone market was actively shrinking, with the analyst house claiming iPhone sales alone had shrunk by roughly 10 per cent. Apple's iPhone revenue was - lest we forget - down more than $22bn in its fiscal '19.

There are likely several factors contributing to this trend. Firstly, flagship phones are costlier than they've ever been, deterring some price-conscious consumers from hitting "buy" on a new blower.

Illustrating this point: when Apple launched the iPhone X in 2017, it was the first time a manufacturer dared to ship a mass-market flagship costing $1,000 for the basic model. Predictably, this gave "permission" for other manufacturers to follow suit — and they have.

And then there is the argument that the mobile market has broadly stagnated. There haven't been many earth-shattering breakthroughs over the past five years. Consequently, many people feel content to hang on to their older phones, only replacing the battery when necessary. After all, if it isn't broke, don't fix it, and the iPhone 6s remains a perfectly workable phone.

But neither of these points address the relative lack of enthusiasm for 5G. Pricing isn't an issue; the Xiaomi Mi 9 Pro, for example, retails at a perfectly palatable $520. Meanwhile, CES has borne a flurry of bargain-basement 5G phones, including the sub-$400 Coolpad Legacy, and the TCL 10 5G, which is expected to retail at under $500.

Moving on to the second point: the availability of 5G doesn't diminish the value of existing LTE devices. They still work as normal. It just so happens that there's something better.

The GSMA also notes that awareness isn't a problem. Across all of the markets it surveyed, around 75 per cent of people have heard of 5G.

If we had to wager a guess, The Reg would argue the slow pace of 5G rollout, which has predominantly focused on metropolitan urban areas, hasn't done much to win new users. There are also widespread (and, we should add, completely unfounded) concerns about the health risks surrounding 5G, with some activists aggressively lobbying local governments to halt the deployment of new masts.

For what it's worth, there are some major points of disagreement with the GSMA's perspective. Speaking to The Reg last November, Gartner analyst Anshul Gupta claimed the smartphone market would dramatically recover in the second half of this year, coinciding with the release of more 5G handsets, and greater network support. ®

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