The global smartphone market is undergoing a major change as we transition from 4G to 5G. And despite the slowdown due to COVID-19, 5G smartphone sales are growing as they penetrate the mature markets like China, South Korea, Europe and the US. Typically, when a new generation of cellular technology comes in, it is more expensive in the beginning. This has happened with 4G, where the initial smartphones were expensive. But with the economies of scale and penetration in emerging markets, 4G smartphones and 4G smart feature phones are now affordable. We expect the same to happen with 5G smartphones.
There are various factors that drive the cost of 5G smartphones. As the technology is still in its nascent stage, smartphone makers need to add a separate baseband, RF antennas and passive filters for 5G to work. But there are other factors, such as high refresh rate displays, bigger batteries and multiple camera setups, which drive the cost of 5G smartphones.
In the latest episode of ‘The Counterpoint Podcast’, host Peter Richardson is joined by analysts Shobhit Srivastava and Ethan Qi to discuss factors that are driving the Bill of Material (BoM) cost of 5G smartphones. In the discussion, we take a deep dive into the differences between sub-6GHz and mmWave implementations, and the additional costs that are involved with mmWave. We also touch upon the role of component vendors in bringing down the cost.