This summer, Verizon and AT&T will start testing 5G, the fifth-generation mobile network likely to speed up adoption of the Internet of Things, from autonomous vehicles to smart homes and more. Unleashing the Internet of Things — projected to double to 50 billion connected ‘things’ globally by 2020 and 500 billion by 2030 — will also enrich the companies that create these new IoT networks, potentially including Cisco Systems, Nokia, Oyj, Ericsson, Qualcomm and Intel. Bottom line: 5G is the most profound expansion of the Internet ever.
Bloomberg notes that it isn’t clear who the winners and losers will be with regard to 5G technology because so much of it hasn’t been tested yet in real world conditions. But the stakes are big: Chetan Sharma Consulting estimates that “spending on 5G equipment will reach $400 billion globally,” compared with the $130 billion it took to build 2G networks.
To be useful, a 5G network needs to focus on latency, or how quickly it responds to requests. That makes sense when contemplating some of the crucial tasks that will be performed by devices emerging from the Internet of Things, from surgical robots to self-driving vehicles.
Likewise, 5G networks need built-in processing, the ability to store data closer to where it’s needed and multiple forms of radio waves to send and receive traffic, all controlled by advanced, adaptable software. And devices must be able to connect directly rather than go through a central network.
Past success in mobile phone networks doesn’t necessarily guarantee success in 5G, says Bloomberg, which describes four notable “missed opportunities.” First, Nokia and Ericsson, were first to develop new digital phone networks, but lost out to Qualcomm on Samsung phones when Korea rolled out the first commercial 3G service.
Sprint pursued a Wi-Max based 4G network, but was beat out by Verizon and then AT&T, which adopted LTE. Texas Instruments put computer-like processors inside phones, pioneering mobile technology, but Qualcomm persuaded phone makers that its technology was better. Ericsson, first to manufacture LTE gear, bet correctly, as Siemens, Huawei Technologies, Alcatel-Lucent waffled between Wi-Max and LTE.
As 5G approaches, the players that stand to win big or go home are Intel, which is still pivoting away from its PC business; Ericsson, with its mobile equipment; and Cisco, with its wired gear. Chetan Sharma also expects mobile carriers to charge five times what they are now, from the addition of collecting fees for wearables and smart gear, which 5G will help become ubiquitous.