Can Qualcomm Hold Its Lead As The Wireless Industry Migrates To 5G?

by Trefis Team
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Qualcomm (NYSE:QCOM) recently announced that it had completed its first test of 5G connectivity on a mobile device. While 5G trials are still underway with standards yet to be finalized, the development indicates that Qualcomm is inching closer to a commercially deployable product, which could allow it to hold a leadership position as the industry transitions from 4G to 5G. While most wireless carriers across the world are targeting 5G deployment after 2020, Qualcomm’s timeline is more aggressive with the company targeting commercial availability of 5G handsets by 2019.

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Why Qualcomm’s Test Is Notable

While wireless carriers have been carrying out 5G trials for about two years now, Qualcomm’s test is notable, as it takes into consideration the power and form factor constraints of a smartphone. The test was carried out using the X50 5G modem that the company announced last year,  on the 28 GHz millimeter wave frequency band. While Qualcomm achieved gigabit speeds in this test, it noted that speeds of 5 Gbps would be possible once full 5G deployments are completed. The company also unveiled its first 5G smartphone reference design, which could serve as a template of sorts for smartphone vendors in designing their 5G devices. Qualcomm also unveiled a millimeter wave antenna module for 5G handsets, which has much smaller dimensions compared to competing designs.

Building A Lead In 5G Will Be Crucial For Qualcomm

Although Qualcomm is the largest vendor of wireless modems, holding about a 50% share of the baseband market in 2016, the company has been facing mounting competition with its market share in terms of volumes seeing a significant decline last year. Computing behemoth Intel has slowly been making inroads into the mobile modem space, supplying modems for some versions of Apple’s iPhone (for which Qualcomm was previously the exclusive vendor), while rivals such as MediaTek have benefited from growth in the lower end of the market. This makes it imperative for Qualcomm to get a head start with its 5G roadmap. Moreover, there is a possibility that the uptake for 5G will be quicker compared to 4G. For instance, research group CCS Insight, cited by the Financial Times, predicts that 300 million 5G handsets will be sold by 2021, translating into about 15% of total global smartphone shipments.

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