5G

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5G

Consumer Trends Driving 5G

Consumer trends such as smart homes, AR and VR and wearables are driving the adoption of 5G technology.

Smart Home

  • The smart home trend is expected to grow to $174 billion by 2025, up from just $55 billion in 2016.
  • Consumers in China are looking for 5G to increase the number and capabilities of connected devices in their homes.
  • According to Deloitte, "5G will 'spur adoption of home automation and control devices into mass adoption,' with 62 percent of smart home device users pegging 'better connectivity in the home as one of the top three capabilities likely to drive them to use 5G.'"

AR and VR

  • The AR and VR market is growing rapidly, at a CAGR of 63.3% from 2018 to 2025. The market value is expected to reach $571.42 billion by 2025.
  • Consumers in South Korea have indicated that they would like to use 5G to participate in virtual reality mobile shopping directly from their homes.
  • Experts predict that in the near future, when access to 5G has expanded, consumers will view an average of one hour of video content on AR/VR glasses per week.
  • In the US, "nearly 35% of Gen Z and millennials say that access to 5G will change how they use augmented reality and virtual reality (AR/VR)."

Wearables

  • The global wearables market is growing at a CAGR of 16.2%, expected to reach $57,653 million by 2022. Smartwatches are seeing the fastest growth.
  • Experts from Deloitte state that 5G will "unleash the potential of wearables." With 5G, wearables will be able to be used for medical applications and communications, with "real-time notifications, more precision, and richer data and insights into our health, surroundings, wellness, and goals."
  • Half of consumers surveyed by Verizon in the US reported that they "were excited about better and faster connectivity for wearables."

5G Readiness Globally

South Korea, the US, Japan and China are all leading the adoption of 5G while undeveloped and developing countries are lagging behind.

South Korea

  • Even though South Korea was the second country in the world to begin using 5G, it is set to become the world leader, due to the level of government control of the telecoms industry. Experts state: "The rapid recent growth of Chinese Telecoms capabilities and recognition of the importance of 5G infrastructure in the next industrial revolution have spurred successive South Korean governments to make a 5G rollout a national imperative, and pushed the telcos to invest in the infrastructure.
  • In April 2019, South Korea initiated the first national consumer rollout of 5G across all three South Korean mobile carriers, SK Telecom, KT and LG Uplus. South Korea has one of the highest mobile penetration rates of any country globally.
  • One of the driving forces behind the rollout of 5G in South Korea was the 2018 Winter Olympics in PyeongChang, as well as a desire to be a leader in smart cities and autonomous cars.

United States

  • The US is letting the private sector lead the way with 5G expansion, which "provides operators with autonomy over their own deployment strategies and methods, which fuels competition and ultimately drives innovation and investment as a result."
  • In the US, 5G is only available in select cities, like New York City, Washington DC, Chicago, Boston, and others, with all the major US mobile carriers in the mist of their 5G rollouts.
  • Some experts predict, however, that the US will lead the world in 5G adoption by 2025, driven by the desire of private companies to capitalize on the increased data usage that 5G will provide. Additionally, experts state that the Coronavirus pandemic may speed up the rollout of 5G in the US, as the increase in remote work is driving the need for faster network.

Japan

  • Japan is expected to reach 49% 5G penetration by 2025, positioning itself as a world leader in 5G adoption.
  • The adoption of 5G in Japan is being driven by their hosting of the Rugby World Cup in 2019 and the 2020 Summer Olympics (now canceled due to Coronavirus).
  • One thing hindering the expansion of 5G in Japan is lack of consumer awareness or interest.

China

  • China is the current largest mobile network in the world but stands in 4th place for 5G adoption, however, some experts state that China may lead 5G adoption globally by 2025 (contradicting other experts that believe the US will obtain this title).
  • China's mobile networks are all state-owned, and therefore are participating in a coordinated, phased rollout of 5G. Currently in this phased rollout, 50 cities in China have access to 5G networks. China's largest mobile operator, China Mobile, has just begun the second phase of 5G rollout, where it aims to "acquire over 232,000 5G base stations as it looks to extend coverage to 28 regions across China."
  • China is pushing for rapid 5G adoption as part of their ‘Made in China 2025' plan, which "envisages 5G as helping to play a transformative role in China’s ambition to gain worldwide lead in a range of new technologies such as industrial IoT, cloud computing and AI. "

Developing and Undeveloped Nations

  • Some developing nations like India, Brazil, and Mexico are poised to take advantage of 5G technology, with their rapidly developing mobile markets. They are predicted to lead 5G adoption among the developing nations.
  • In Africa and among other developing nations in the world, mobile networks still heavily rely on 3G technology. However, the adoption of 5G in these areas could be more rapid as they are not "burdened by legacy infrastructure."
  • Some experts predict that 5G will begin to spread to developing countries like "Peru, Nigeria, 22 smaller European markets, and developing countries in Asia ranging from Cambodia to Sri Lanka" by 2021, including South Africa.

5G Driving Economic Growth Globally

5G is expected to have a massive impact on the global economy, with the most impact in China, the US and Japan. Industries drastically affected will include manufacturing, transportation and retail.

Global Impact

  • 5G will impact the global economy, with $13.2 trillion in potential global sales activity enabled by 5G by 2035 across many industries.
  • The expansion of 5G technology is expected to create 22.3 million jobs by 2035.
  • By 2024, there will be 1.901 billion mobile subscriptions worldwide.

Countries Most Impacted

  • By 2035, China will see $1.130 trillion of 5G enabled gross output and 10.9 million jobs created by the 5G value chain.
  • By 2035, the United States will see 2.8 million jobs created by 5G and $786 billion in 5G enabled gross output.
  • Japan, by 2035, will see $406 billion in 5G enabled gross output and 2.3 million jobs created by 5G.
  • Following China, the US and Japan, countries that will see the greatest impact from 5G are Germany, South Korea, France and the UK.

Manufacturing

  • Manufacturing is one sector that will be the most impacted by 5G technology, which will help the industry become more flexible, more efficient, safer and more cost effective. 5G will generate $4.687 trillion in sales in the manufacturing sector.
  • The most impact on manufacturing from 5G is the potential for factory automation, as well as real-time production inspections and assembly line maintenance.
  • Manufacturing will become more efficient as 5G allows for increased Smart Factories, including real-time data analysis for machines at the factory and in the field.

Transportation

  • 5G will impact commercial, public and private transportation by improving vehicle-to-vehicle communications, which will eventually allow for self-driving vehicles. Globally, 5G will generate $627 billion in sales in the transportation and storage industry.
  • Additionally, 5G will improve vehicle-to-infrastructure communication, which will also increase the feasibility of self-driving vehicles.
  • The use of 5G in vehicles will improve road safety, decrease shipping times, increase fuel-efficiency and, therefore, decrease vehicle pollution.

Retail

  • 5G will drastically affect the retail industry, with an increase in mobile shopping and the potential for VR in fitting rooms and in-store experiences. Globally, 5G will generate $1.198 trillion in sales in the retail and wholesale industries.
  • Experts predict that 5G will improve personalization, allow for mixed technology experiences in stores, and improve inventory tracking.
  • 5G will also increase mobile shopping, "with 5G slated to drive $12 billion in new mobile commerce revenue by 2021."

IoT Growth Globally

The global IoT market is growing at a CAGR of 26.9% till 2023, with the most growth in North America, APAC and Europe. This is being driven by numerous technological advances like cloud storage. IoT will have both positive and negative impacts on our society.

Global Growth

  • Experts predict IoT will see explosive growth in the near future, with as many as 41-125 billion connected devices by 2027 to 2030.
  • The IoT market size is growing at a CAGR of 26.9% from 2017 to 2023, and is expected to reach USD 561.0 billion by 2022.
  • By 2025, experts predict that the yearly economic impact of IoT on the economy could range from $4-$11 trillion.

Geographic Growth

  • North America dominates the IoT market currently, fueled by their established economies and start-up culture and rapid digitization.
  • The APAC region stands to hold a major market share by 2022, followed by Europe, the MEA and Latin America. The growth in the APAC region is driven by cross-vertical collaborations, government initiatives, and private company investments in the following industries: transportation & logistics, manufacturing, utility, agriculture and retail.
  • In Europe, Germany, the United Kingdom, France, Italy, Spain and the Netherlands are driving IoT adoption, with the European market responsible for 23% of global IoT spending.

Growth Drivers

  • According to PWC, there are six contributing factors to the growth of IoT globally: a decrease in the cost of data storage, increased use of devices including sensors, the decreasing cost of megabytes, cloud storage, the "convergence of information technology and operational technology", and finally, the "Internet world is colliding with the industrial world to create unprecedented opportunities."
  • Businesses are driving much of the investment in IoT, with 90% of technology, media and telecom executives stating that IoT growth is critical to their business. Companies will invest up to $1.1 trillion in IoT by 2023.
  • Additionally, governments and cities are also contributing to the growth, especially for Smart City IoT technology. 60% of US cities have invested in Smart City IoT Technology. The global "value of smart city initiatives incorporating IoT and AI is expected to surpass $2 trillion by 2025."

Positive Impact

Negative Impact

  • There are some concerns in security with the expansion of IoT. For example, the increased surveillance of people in their homes due to smart home sensors causes many security concerns if that information is obtained by criminals or misused by governments or businesses.
  • Companies, in the race to be first-to-market with new IoT products, may overlook some security flaws in their products, which could then lead to hacking and security breaches.
  • With the increased use of IoT in the healthcare field, the potential for a security breach of confidential healthcare information increases.

Augmented and Virtual Reality

The AR/VR market is growing rapidly, expected to reach USD 571.42 Billion by 2025. Three trends in AR/VR are the combination of AI and AR/VR, mobile AR/VR and AR/VR in education.

Growth

  • The AR/VR market is expected to reach USD 571.42 Billion by 2025, growing at a CAGR of 63.3% between 2018 and 2025.
  • North America has invested the most into AR/VR technology and is expected to see the fastest growth in the next five years.
  • Global spending on VR/AR technology was forecast to increase by 78.5% from 2020 to 2021.

Adoption

  • Globally, 27% of business executives are piloting the use of AR/VR technologies, while 24% are evaluating and preparing to pilot, 22% have already adopted in one part of their business, 13% have adopted in multiple parts of their business, and 11% are not planning on adopting the technology.
  • 56% of businesses are already using mobile VR/AR technology, while 35% of businesses are considering using the technology. Specifically, "26% of enterprises are using AR and VR to train employees. 60% of organizations are using the technology to virtually supplement labor on production floors. 53% of companies are adopting the tech for conducting virtual customer visits. 53% of them are using it for virtual design and product engineering."
  • Some experts believe that the Coronavirus outbreak will increase the adoption of VR and AR technologies.

AI meets AR/VR

  • One big trend in the VR/AR is the combination of AR/VR and Artificial Intelligence. This will lead to "interactive workspaces and improved image recognition facilities."
  • One expert predicts that "Artificial intelligence and virtual reality will combine to provide augmented intelligence, helping humans think better. There are two problems being solved here. First, offloading more and more cognitive tasks to machines frees humans to focus on higher and higher value thinking. Second, improving the interface between humans and machines allows for better and faster communication."
  • AI and VR/AR combined will also be consumer-facing, including more advanced image filters and alterations and applications in gaming.
  • Deloitte predicts that AI and VR/AR combined will drastically impact the healthcare field, by "offering AR/MR-enabled hands-free solutions and AI-based diagnostic tools."

Mobile AR/VR

  • Mobile AR/VR is trending in 2020, with app developers becoming increasingly comfortable with Apple’s ARKit and Google’s ARCore software development kits (SDKs). The use of these kits to develop mobile AR apps has "more than doubled the amount of mobile AR-enabled devices and tripled the number of active users during 1.5 years."
  • The increase in availability of 5G will have a significant impact on the use of mobile AR and VR, as "5G, by offering a super-fast mobile network, will increase the pace of data transfer to the cloud, its processing, and formation of a virtual image that will later deliver an enhanced virtual experience to the consumers."
  • 5G will also allow for streaming VR and cheaper VR headsets.

AR/VR Education

  • AR/VR use in education is expected to increase in 2020 and beyond, as VR in education moves away from rare experiences to solving everyday problems within the current education system.
  • Virtual reality is expected to be utilized for distance learning opportunities, while AR is expected to be used for on-the-job training.
  • One example of this is Google Expeditions, which "provides both VR and AR tours that let teachers use augmented reality in education. With AR technology and mobile devices, users can bring 3D objects into the classroom, then walk around and explore them. These can be tornadoes, volcanoes, or even DNA. Google Expeditions covers various subjects and offers more than 100 AR Expeditions through the circulatory system, history of technology, and the moon landing."
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