If you are like me, you probably heard the term 5G and figured out it has something to do with faster connections, but that was the extent of your knowledge. Unlike me, you probably don’t remember black and white TV, rotary phones, and thermal fax paper. I remember getting a portable phone the size of a brick and thinking it was the coolest thing to carry around. People like me are a dying breed…
Because I lived through the dark days of technology, I took an interest in the “G” revolution. Yes, the “G” stands for “Generation”. The funny thing is that there was never a 1G. It only became a 1G after 2G was developed. I guess you can’t promote something as better until you name it.
For those of you still alive, you may recall 1G, which was introduced in the 1980s, and was the first analog network for voice calls. 2G was faster and digital. [1]
3G was where the technology really sped up – literally. 3G allowed for voice, phone, and web browsing. 4G was even faster. Great! You can hold boring but better videoconferences! You can watch reruns of Game of Thrones on your phone! You can be a mindless YouTube watcher! [2]
GAME CHANGER
It’s great to do things faster with more data, but the game changer is technology that can push the dream of IoT (Internet of Things), which means that anything and everything can be connected. With a theoretical speed of 10 Gbps (gigabits per second), 5G not only is exponentially faster than 4G, but also has far lower latency and far more reliability.[3]
5G will allow several hundred more devices to use the 5G network per square mile. The ability to connect more devices is what is really special as this creates the superhighway of the future. 5G innovations are only at the beginning stages, but agriculture is an example where everything, from monitoring soil conditions, to water usage, to germination cycles, to autonomous pickers and tractors, can be interconnected on the superhighway. Imagine your local farmer sitting on his porch with his tablet controlling farming.
Other industries that will benefit include manufacturing which can see significant gains in automation. By wirelessly interconnecting all phases of manufacturing, higher efficiency and profitability can be achieved. Transportation should show gains through enhanced vehicle-to- vehicle communication, more transportation data, and large-scale introduction of driverless vehicles. The list goes on and on, from financial services to healthcare to media and entertainment. I can hardly wait until virtual reality systems are standard – Netflix VR!
But don’t we do this already? Yes and no. Creating a platform where everything is connected is at the beginning stages, as is 5G. Some countries are pursuing 5G as an all country project (think China). When you are a one-party country, this is possible. This is not to say they are correct, as there has to be sufficient national and local discussion about standards, privacy, health, etc. But moving too slow is not good. We don’t want to lose the competitive edge or be driven to purchase technology only from other countries.
WHAT IS THE POSSIBLE MARKET SIZE?
According to MarketsandMarkets™, by 2026, the 5G market will be $31.7 billion. [4] I think this is at the low end. Ericsson sees the potential around $113 billion and I have seen even higher estimates. Whatever the number, the 5G market is huge and its application and impact is at the beginning stages of discussion.
WINNER AND LOSERS
Who are the winners in all of this? In my opinion, this is the type of technology where sitting on the sidelines could mean early adaptors will become dominant. As new devices from phones to antennas are developed to incorporate 5G, the phone companies will presumably be winners as current phones are not likely to support 5G (at least I have not heard any report that says you can use existing devices – planned obsolesce). Other big winners are those companies that produce the 5G cabling, antennas, and platforms to support 5G. This is somewhat of a greenfield area as the company that develops the best cabling from signal stability, electromagnetic shielding, low loss, and flexibility will be big winners. Those companies that are focusing on the IoT platform space and helping companies connect their operations will also be big winners.
Who are the losers? Probably those countries, industries, and businesses that stand on the sidelines. As I mentioned above, China is already leaping into the 5G industry. China’s Ministry of Industry and Information Technology (MIIT) has granted 5G licenses to the country’s three telecommunications network operators and the nation’s cable network giant, marking the official commencement of the Chinese 5G era. [5]
TAKING BETS
I am making a big bet that 5G has the potential to revolutionize America. 5G can increase business competitiveness in an increasingly competitive global market. This is not about erecting borders around countries. 5G has the ability to seamlessly connect businesses around the world, and in so doing, shorten everything from product introductions and manufacturing processes to delivery. The customer experience will be richer and data will be more encompassing and more shareable.
About the author: Gary Sumihiro is the founder of Sumihiro Investments, LLC and global strategic advisor and board member of a number of companies.
[1] Without getting too technical, analog translates data into electrical pulses while digital is information translated into binary format. (Ouch! My head hurts already…)
[2] Although it depends on whether you are stationary or moving, in general 1G was around 2.5 Kbps (kilobits per second). 2G was around 50 Kbps. 3G around 2Mbps (megabits per second), and 4g tops out around 100 Mbps.
[3] Latency in layman’s term is the movie you are watching is downloaded faster and there would be no pauses as the data is streamed to your device.
[4] According to “5G Enterprise Market by Access Equipment (Radio Node, Service Node, DAS), Core Network Technology (SDN, NFV), Services (Platform, Software), Organization Size (SME, Large Enterprises), End User (BFSI, Retail), and Geography – Global Forecast to 2026”, published by MarketsandMarkets™, the 5G market will be over $31 billion by 2026.
[5] South China Morning Post, June 2019: “What will 5G in China mean for you?” can be found at: https://www.scmp.com/tech/big-tech/article/3013454/what-will-5g-china-mean-you