PredictiVu’s survey shows huge pent-up demand for 5G as consumers see it to be a gamechanger in the new normal.
10X faster downloads, ultra-low latency, connected cars, and smart buildings and cities – these are some of the promises of 5G generating considerable excitement in India.
Even though 5G networks are not yet available, the technology’s life-changing possibilities are attracting an increasing number of consumers. Surveys show that consumers associate 5G with several advantages, including:
- Better network in crowded areas.
- Better Work- and School-From-Home experience.
- Better video.
- A more connected world that includes increased capacity for self-driving cars, drone taxis, and other devices.
These expectations will play a crucial role in driving smartphone sales, according to PredictiVu’s latest report MBO: Smartphone India Overview – Part 2, which examines the future of the 5G smartphone market in India.
India has become the fourth largest 5G smartphone market in terms of shipments. More than three million units were shipped in 2020, and sales are expected to reach 144 million by 2025. Such is the demand, that even without any 5G infrastructure the industry is expected to grow tenfold in 2021 itself because consumers anticipate 5G to be just around the corner.
India’s digital transformation has accelerated during the COVID-19 pandemic. From remote working to online education to digital payments, telehealth to video conferencing, more consumers and corporates use digital services today than ever before. Mobile data consumption per smartphone user continues to grow strongly — average data consumption has increased from 13 GB per month in 2019 to 14.6 GB per month in 2020. This is the second-highest globally and is expected to grow to around 40 GB per month by 2026.
Furthermore, consumer expectation has also grown in terms of larger data packs, faster speeds, more reliable connectivity, and better-bundled services, like OTT video and music. This adds to the hype surrounding 5G. At least 40 million smartphone users are expected to adopt 5G in the first year of its availability, and users will be willing to pay even 50% more for 5G plans that include bundled digital services than they would for a simple 5G connection.
All this represents a world of opportunity for smartphone brands that have spotted the potential. India has seen a surge in the launch of 5G smartphones, with OnePlus emerging as the market leader. Xiaomi and Realme are working with Qualcomm and MediaTek to make 5G smartphones more affordable, which will contribute to their adoption.
Realme, which has an array of affordable 5G phones in India, plans to launch a smartphone that will cost as little as ₹7,000 (US$100). Micromax is also planning to launch at least 4-5 devices every quarter by 2021, including an “aggressively priced” 5G device. Reliance Jio Infocomm Ltd. has forged a cloud partnership with Google to help develop technology solutions for its enterprise and consumer offerings as Jio prepares to launch 5G services.
A slew of cutbacks accompanies the affordability factor, which casts a doubt on the life cycle of 5G phones. To keep costs low, companies are making major downgrades in order to get 5G technology at a low rate. Take Realme 8 5G, one of the most affordable smartphones. To make room for 5G, Realme has reduced display and camera features, stereo speakers, and charging speed. Other brands might hold back on key aspects as well.
When it comes to evaluating 5G smartphones, consumers are likely to consider brand image, innovations, and 5G tech R&D leadership. OnePlus is the leading 5G smartphone with a 58% market share in 2020, followed by Apple at 20%.
In a recent survey, more than 80% of respondents believed that 5G will have a positive impact on smartphone sales. 83% cited 5G readiness as among the top considerations for smartphone purchase.
Bharti Airtel demonstrated a live 5G service on a use-case basis over a commercial network in Hyderabad on January 28 this year, while Reliance head Mukesh Ambani has said that Reliance Industries (RIL) will be ready for India’s “5G revolution” in the second half of 2021.
For service providers, 5G offers a great opportunity to grow revenues by offering new customer experiences. By 2030, 5G service innovation initiatives are expected to drive 30% growth. Globally, service providers are expected to generate $131 billion in revenues from 5G consumer use cases, which is key to this growth. Beyond high-speed data access, key opportunities are to be found in UHD video, e-Commerce, live sports and music, gaming, Augmented Reality (AR), Virtual Reality (VR), Internet-of-Things (IoT), and digital Out-Of-Home (OOH) advertising.
Going forward, 5G is going to be a big driver for smartphone consumers and MBOs need to embrace it with better 5G ads through hoardings and other media.
Senior Business Analyst
PredictiVu Pvt Ltd