With suitable acknowledgement to the saying “build it and they will come” from the movie “Field of Dreams”, I’ve been thinking about the status of 5G in some detail these past few months. While I am not supporting the contrarian view of the blog title, it makes for an interesting thought exercise. First, it’s never good if no one comes; just ask the operators. Results from a recent survey showed 75% of operators had no concrete plans to deploy 5G. Nearly 40% of the respondents said they would hold off until there was a clear RoI (Return on Investment), or in other words, until people were coming!
But, there is a tremendous amount of 5G development activity. It is next to impossible to avoid the deepening stream of product announcements, test results, standards activities and general progress aimed at 5G networks. I think these two statements support each other. You need to define, develop and test the network to understand how to develop a successful business model. What is disconnecting is the vision of 5G and the early implementation of “5G” networks. The image from Nokia shows the 5G vision:
As I’ve said in many 5G presentations, the “vision” is transformative for society and the compound semiconductor industry. It depends on three pillars: Extreme Mobile Broadband, Critical Machine Communication and Massive Machine Communications. To enable these pillars means faster and ubiquitous broadband coverage, highly reliable, low latency networks and massive increases in connected devices and data traffic. The benefits of these features will be profound. Augmented/virtual reality for industrial and consumer applications, intelligent transportation to increase productivity, eliminate fatalities and reduce energy consumption, broadening cellular and broadband coverage areas. The 5G PPP body has put together What is 5G? for a closer look at the benefits of 5G.
The vision is clear and the timing is into the 2020s, but it is interesting to see that operators are already deploying “5G” networks and people are starting to ask whether 5G is destined to be a disappointment. So, I think the disconnect is between the vision, supported by developing standards and implementation of what is being rushed out to capture the “5G” buzz. The challenge for the industry is setting performance expectations and defining what actually constitutes 5G, as opposed to what is called 5G.
The pundits who are asking whether 5G is destined to disappoint are usually comparing it to established 4G networks.
This brings up an interesting point, however. In my last blog, I said I was going to invoke the icon of my cousin April more in 2017 and this is a perfect example. As a quick refresher, April lives on a beautiful, secluded lake in the Adirondack Mountains of New York State. She gets VERY limited wireless coverage, but her DSL broadband is faster than my cable connection, 35 miles outside of Boston. In the winter, they often got a significant amount of lake-effect snow, so snowmobiling is a big activity on the lake. Recently, a snowmobile operator had a serious accident, requiring medical assistance…but the phone lines were out, meaning no internet access, no phone service and no ability to communicate.
Now, imagine we achieve the 5G vision. In this vision, everything is connected, with remote access at high data rates and reliability. In this case, help probably would have been dispatched as soon as the snowmobiler got into the accident, but what if the network failed or wasn’t ubiquitous? I think the ultimate gauge of the satisfaction and the success of 5G will not be determined by how well it works in downtown New York City, but by how well it serves my cousin April on her lake in the Adirondacks!
So what does this all mean for the compound semiconductor market? The 5G vision will rely on networks that use higher frequency, wider bandwidth frequencies. Massive MIMO antennas with many elements, each containing transmit/receive chains will enable the higher data rates that are a mainstay of 5G. Quantities will increase to provide the ubiquitous coverage and the most appropriate device technologies will become clear as networks evolve. This could be an enormous driver for the compound semiconductor industry, but expectation is a fickle master. If consumers start associating 5G with slightly faster 4G, that is likely to put a damper on the development of 5G, because no one will be coming to the networks that got built!
For clients, The Hype and the Promise of 5G for the RF Compound Semiconductor Market insight provides a bit more background on some of the thoughts in this blog. If you would like access to this, or any other publication from my service, please feel free to contact me. The topic of 5G will figure prominently in what I look at this year, so stay tuned for more developments.