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Game on for China's 5G companies

Published on 12/21 2018  Source: China Daily


Huge investments, intensive R&D mark the race toward next-gen mobile technology 

It's a high-stakes, high-tech race. Billions, maybe, trillions of dollars are up for grabs globally, and Chinese technology companies are vying to scoop up as much of the fifth-generation, or 5G, mobile telecommunication technology pie as possible as D-Day of commercial launch around 2020 nears. 

In doing so, they are also seeking the honor of being remembered as the first out of the gate, and in the process generating a bit of mirth. 

On Nov 30, a handful of engineers employed by smartphone maker Oppo in China, Japan and the United States made what they claimed was the world's first 5G-enabled cross-continent video call. 

The call was through WeChat, the most popular messaging and social-media app in China. They used Oppo's 5G prototype smartphones to make the 17-minute call under the trial 5G network bandwidth of 100 megabits per second. 

A day earlier, Chinese smartphone vendor Vivo demonstrated its 5G prototype handset to the public for trial use in Beijing. Arguably, Vivo's is the first such move in the industry. Using a Vivo device on a trial 5G network, consumers were able to surf the internet. 

In the first week of December, Lin Bin, president of Xiaomi Corp, posted a message on Weibo, China's Twitter-like platform, and claimed it could well be "the first Weibo post enabled by a 5G network". Lin, of course, used Xiaomi's 5G-ready smartphone. 

Chinese smartphone makers' research and development of 5G smartphones is happening at a time when large-scale commercial deployment of the superfast networks is still one or two years away. Companies are working hard to bring 5G smartphones to the market as soon as possible, with some eyeing the first half of 2019 for the earliest launch. 

"They are betting on the new-generation of mobile communication technology to cope with a year-long downward spiral in global smartphone shipments and, more important, to prepare for a promising future where 5G devices will enable a slate of new applications," says James Yan, research director at Counterpoint Technology Market Research. "5G is a once-in-a-decade opportunity for smartphone makers." 

The next-gen data tech will be at least 10 times faster than 4G and will support superfast movie downloads. Downloading 8-gigabytes of content might take a few seconds, experts say. 

5G also has the potential to radically alter how the world's best smartphones are used every day. 

"Think augmented reality (computer graphics merging with the real world, such as fighting a 3D-dinosaur in a living room), virtual reality, improved streaming resolutions, holographic displays, enhanced power and next-gen cloud computing," says Nicole Peng, senior director of market research company Canalys. 

Though some of these initial applications are possible in 4G, "it is 5G that is going to be a significant jump forward for phones because only with the latter's higher bandwidth that these applications can be more sophisticated and adopted by most consumers, delivering real amazing impact," Peng says. 

The mounting enthusiasm for 5G handsets came as the global smartphone industry has been in decline for six straight quarters due to market saturation. 

In the third quarter of this year, worldwide smartphone shipments fell by 3 percent year-on-year to 386.9 million units, according to data from Counterpoint Technology Market Research. 

But the advent of 5G smartphones is expected to inject new vitality into the sector. According to a report by Counterpoint, global 5G smartphone shipments are expected to reach 108.2 million units in 2021, up an estimated 255 percent year-on-year, partially offsetting the continued shrinkage in 4G handset volume. 

To pounce on the promising opportunity, Chinese smartphone makers such as Huawei, Xiaomi, Vivo, Oppo, Lenovo, OnePlus, and ZTE are all aiming to launch 5G smartphones next year. They are accelerating R&D efforts to make it happen. 

Walter Ji, president of Huawei's Western European consumer business group, said in an interview with the telecom website T3 in July that the company will bring 5G smartphones to the market either in its P series models in March or in its Mate series in September. 

"Now, the size of the chipset is not small enough to be used, to be integrated in a smartphone," Ji said, adding that 5G will "for sure" be in the Mate series in September if it's not in the P30 sooner. 

The world's second-largest smartphone vendor - behind Samsung Electronics - Huawei invested $15 billion (13.2 billion euros; £12 billion) to $20 billion in R&D this year. It first beat Apple Inc in terms of smartphone shipments in the second quarter of 2018 and maintained its lead in the third quarter. 

"Huawei's edge lies in its full 5G-product lineup, including chips, telecom equipment and smartphones. Unlike its rivals that rely on Qualcomm Inc for 5G chipsets, Huawei's ability to develop in-house 5G chipsets gives it an obvious upper hand," says Xiang Ligang, CEO of telecoms industry website Cctime. 

Chen Mingyong, CEO of Oppo, said in November: "5G is a trend that we must catch. In addition to being among the first batch of players to unveil 5G smartphones, Oppo will step up the exploration of application scenarios of next-gen devices, which will ultimately play a role in deciding the true value of the superfast technology." 

According to Chen, the company will increase its R&D investment to 10 billion yuan ($1.45 billion; 1.3 billion euros; £1.15 billion) next year from 4 billion yuan this year. As of September, Oppo has filed about 22,712 patent applications, with artificial intelligence patents exceeding 300. 

Despite heavy investment by smartphone vendors, 5G growth in the early commercial phase is expected to be low due to several factors, some analysts say. 

"There are still forward-looking 5G standards that are unconfirmed, creating uncertainty around product and service opportunities. We also expect 5G chips to have a higher price point which will initially drive the cost of devices up," Tom Kang, research director of Counterpoint, wrote in an industry report. "5G-capable devices will be premium only in the beginning." 

But once better 5G business cases and infrastructure are established, the smartphone market will begin seeing higher sales overall with more contributions from 5G smartphones, Kang wrote.