| New Delhi |
Updated: March 1, 2020 4:02:08 pm
The world’s top smartphone makers, with the exception of Apple, have already launched 5G smartphones in a number of markets worldwide. Now, these companies are bracing themselves to launch the first wave of 5G handsets in India, the world’s second-largest smartphone market — which is nowhere near a 5G network at the moment. Realme, iQOO and a bevy of Chinese companies want to flood the market with 5G smartphones in the coming months.
Everyone seems excited about 5G, but there is one small issue. India is at least 18 months away from its first seeings its 5G services, that too if it is lucky. So what’s the point of releasing 5G smartphones at all?
The big differences between 4G and 5G
Before we move forward, consumers need to understand what is 5G exactly, how fast is it?
Well, the fifth generation of wireless networks – better known as 5G – is expected to be nearly 100 times faster than 4G. With such speed, it could be possible to download a full-length HD movie in less than 10 seconds, a task that usually takes about seven or eight minutes on 4G. 5G also offers much faster upload speeds.
But the speed you will get also depends on which spectrum band (it could be mmwave or sub-6GHz) operator runs the 5G technology on. The second advantage of 5G is its reduced latency, which basically means it could be advantageous in the case of autonomous vehicles and IoT devices
Brands don’t want to be left behind in the 5G race
Earlier this week, Realme X50 Pro 5G became the first smartphone with 5G capability in India. Just a day after the launch of Realme X50 Pro 5G, a new player iQOO launched its first 5G smartphone in India. Expect a lot more 5G smartphones to make their way to India in the coming months.
“All of the iPhones and some Samsung smartphones were already on 4G even before 4G was rolled out in India. In a way, Micromax lost its market share heavily because they didn’t move as quickly to 4G,” remembers Rushabh Doshi, an analyst with research firm Canalys.
“Three-four years ago, the major keyword for marketing was 4G ready or LTE-enabled. What the vendors are currently doing is, at least for flagships, enabling 5G so that people who buy these devices feel they are 5G-ready,” he explains.
Doshi believes Chinese brands, especially new players, want to be ahead of Apple which is known as the market driver when it comes to new technology. “Yes, 5G is being used as a gimmick by brands, but I believe this is a very normal move towards 5G,” he said.
So despite the clear lack of benefit to consumers, why are smartphone brands competing to launch 5G smartphones?
Opportunity to enter premium segment
Madhav Sheth, who heads Realme’s India business, does not agree that 5G is a marketing tool. He instead sees 5G as an entry point in the premium smartphone segment where Apple, OnePlus and Samsung currently are leaders.
The Realme X50 Pro 5G is priced higher compared to the brand’s previous flagships. The handset is priced in the range of Rs 37,999 and Rs 44,999. That’s an expensive smartphone by Realme’s standards.
Sheth agrees that the X50 Pro will give the brand a “premium edge”, which is needed if Realme wants to be seen as a high-end smartphone maker. That said, he also agrees that the 5G territory is still untested and the brand’s future premium 5G lineup will depend on the performance of the X50 Pro in the market. Without revealing too many details, Sheth said the company is planning to launch 5G smartphones at cheaper prices, the only way to expand the market for 5G smartphones.
Doshi feels that Realme is still a tier-1 and tier-2 brand, unlike Xiaomi which has a pan India presence. The brand focuses on mid-end and premium smartphones with top-end specifications, something core to Realme’s philosophy.
“Quite frankly how many people will buy the X50 Pro 5G is subjective because it is coming up in a higher price bracket,” Doshi said, adding that the brand is trying to push their ASP by appealing to their current consumers with new features.”
Be it Realme or iQoo, Doshi agrees that 5G is a good strategy by vendors to push up the prices of smartphones. The analyst says this will help newer brands differentiate from the low-cost 4G phones available in the market.
Doshi, however, suspects Realme might not be able to keep up to the high-end segment once 5G smartphones start getting popular in India. “I think 5G will be democratised faster than 4G. Once that happens, Xiaomi will be pushing down the prices and Realme will get stuck in a race to the bottom. In the end, they will not be able to keep to the highest segment as OnePlus has done.”
Express Tech is now on Telegram. Click here to join our channel (@expresstechnology) and stay updated with the latest tech news
5G is not just about faster downloads…it’s the future of IoT
If you thought 5G is limited to smartphones and getting faster downloads is the only reason brands are launching 5G-ready phones in the first place, then you are wrong. Sheth says the strategy to launch a 5G-ready smartphone in the country so early is directly related to its plans to bring a range of Internet of Things (IoT) devices in the market.
“We really want to launch more and more personal technologies other than premium flagship devices. So that’s going to be our strategy. I believe the hardware has to be ready before the 5G services start rolling out in India,” he said.
Sheth says a 5G-ready smartphone is just a part of the whole ecosystem. He, in fact, envisions the entire lineup of upcoming IoT products to be connected to each other.
“We want to integrate our entire IoT products with 5G, where our fitness brands can make payments just like our mobile devices do. We are planning a common platform where we can integrate our entire ecosystem of products with Realme PaySa, IoT products, smartphones and TVs connected with a 5G server. If I am able to do that the connectivity between all of this will be much better. That is what the future I am looking at,” says Sheth.
Sheth also indicated that the company is looking to add 5G connectivity in the smart TV, though nothing has been finalised yet. Realme’s first smart TVs will launch in India in the second quarter of 2020.
…but not all brands are ready to launch 5G phones in India
If Realme is aggressively pushing 5G smartphones, Samsung has adopted a wait and watch policy. The company’s latest lineup of flagship Galaxy S20 series, which includes the Galaxy S20, S20 Plus, and S20 Ultra, does not include 5G even though the Exynos 990 chipset can be paired with the 5G cellular modem.
“They [Samsung] aren’t appealing to the fast-growing market which is the youth and the aspirational buyers who want a phone because it’s got something extra compared to the other smartphones,” Doshi said.
Like Samsung, Doshi feels Apple’s iPhone 12 series will skip 5G in India when the phones start shipping later this year. “It might go the Samsung way because having a 5G modem will have an impact on battery life and Apple might need another year to perfect the design of a 5G iPhone before it launches the device in more markets,” he said.
“It is easier for Apple to launch a 5G iPhone in a few markets first, test, performance, test feedback and then bring the device to more markets as time goes on. India is still a small market for Apple,” he adds.
But there are questions about whether all of the iPhone 12 models will have 5G or only the top-end models. “The iPhone 12 Pro Max, or whatever they call it, might be a 5G-only variant that would ensure that people would go up the value chain,” Doshi predicts.
The analysts said Apple could employ two strategies – either have a 5G-variant only for certain markets or they have the most expensive device in 5G-only configuration.
Telecom distress could delay 5G in India
Going by the current crisis in the Indian telecom sector, 5G will likely remain a distant dream for most Indian consumers for a few more years.
“All the players have gone on record saying they will not be bidding for the 5G spectrum which the government has come out with. TRAI has suggested a base price of Rs 492 crore per unit of 3300-3600 MHz airwaves, which is one of the highest globally. So, based on that, we estimated that the ROC would be hardly 4.7 per cent of that investment. This reserve price needs to come down because it is not viable for any operator to bid for 5G,” said a telecom analyst from a reputed rating agency, who wished to remain anonymous.
The distress in the telecom sector is not lost on anyone. With Reliance Jio making data dirt-cheap, the companies which were making 30 per cent Ebitda margin are playing with under 10 per cent. If that was not enough, the AGR (adjusted gross revenues) ruling has made life tougher and even pushed some service providers like Vodafone-Idea to the verge of bankruptcy.
The less talked about aspect is that even as 5G is being talked up, India still has not more than 50 per cent 4G penetration. This is why analysts think companies should invest in 4G Plus infrastructure and not go all out behind 5G.
Meanwhile, Doshi forecasts 5G will become mainstream in India by 2024. The analyst expects more than 50 per cent of the devices shipping in 2021 will be 5G in India because everybody will move to 5G from a “supply chain” perspective.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines
© IE Online Media Services Pvt Ltd