Thursday, 08 October 2020 07:58

Sales of 5G smartphones rose in US in August as prices fell

The Samsung Galaxy A71 5G. The Samsung Galaxy A71 5G. Courtesy Samsung

Sales of 5G smartphones accounted for 14% of total smartphone sales in the US in August, a big rise from just 3% in January, the technology analyst firm Counterpoint Research says.

The company said that consumers had shown an increased interest in 5G devices as the prices of such devices continued to fall.

It predicted that the percentage of sales for 5G devices would go up even more after Apple released a 5G iPhone on 13 October as expected.

Counterpoint research director Jeff Fieldhack said: “5G penetration was just around 1% in 2019. However, it has steadily increased this year as more OEMs launched 5G devices.

"After Samsung and LG initially launched 5G devices in June 2019, OnePlus soon followed in August 2019. Motorola launched its first 5G smartphone in July this year while T-Mobile launched the most affordable 5G device in the market – REVVL 5G, through a white-label partnership with TCL.

us 5g sales

"We expect more OEMs to launch 5G devices as 5G chipsets continue moving down price tiers. Carriers want more of their subscriber base on 5G networks and are pushing OEMs to launch more affordable 5G smartphones.

“However, the biggest shift will come when Apple launches its newest iPhones in Q4. Apple has a market share of around 40% or higher in the US. When Apple begins selling 5G iPhones, this will sharply increase the market share of 5G devices on a monthly sell-through basis. Overall, we expect 5G smartphones to make up around 20% of total sales in 2020.”

Commenting on 5G average selling price trends, senior research analyst Hanish Bhatia said: “Over the last year, we have seen the 5G ASP drop over US$300 (A$420) to reach US$730 in July 2020.

"Samsung was the first to begin launching devices below US$600 with the Galaxy A71 5G in June and continued it with the A51 5G in August for US$499.99. In H2 2020, more OEMs started offering affordable 5G smartphones, mainly powered by Qualcomm’s Snapdragon 765G or Samsung’s own Exynos 980 processor.

"Such devices include the LG Velvet, REVVL 5G and the upcoming Pixel 5 and Pixel 4a 5G. T-Mobile is trying to drive down 5G smartphone prices even further. It has announced the first MediaTek-powered 5G smartphone through its custom LG Velvet 5G. The device itself costs US$588, compared to the Snapdragon 765G version from AT&T for US$599 and Verizon’s ‘UW’ mmWave variant for US$699.

us 5g asp trends

"Verizon continues to have the highest 5G smartphone ASP due to its requirement of mmWave, which typically adds around US$50 to US$100 to the bill of materials cost."

Research analyst Maurice Klaehne said: “The most popular 5G smartphone so far in 2020 is the Samsung Galaxy S20 Plus 5G. Despite the slow start to S20 sales due to COVID-19, we saw a boost in sales in June and July because of pent-up demand and stimulus money.

"We continue to see demand rise due to launch of more affordable 5G smartphones by Samsung in Q2. Previously, 5G smartphones were considered expensive, putting them out of reach for many who could not afford a US$1,000+ device.

"Now, with devices entering the sub-US$600 price band, 5G is becoming more accessible and attainable for consumers. According to our latest surveys, sub-US$600 5G smartphones have seen increased interest from consumers at carriers with low- and mid-band 5G networks.

"This is because mmWave 5G is still not available nationwide, thus limiting usability for many consumers. Verizon has said it would have nationwide low-band 5G available by the end of the year through dynamic spectrum sharing. This will help increase competition between the carriers and continue driving down 5G smartphone ASPs.”

Graphs courtesy Counterpoint Research

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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