The 5G era: New horizons for advanced-electronics and industrial companies

The 5G era: New horizons for advanced-electronics and industrial companies

The next generation of wireless connectivity has arrived: 5G has the capacity to support a huge number of connections simultaneously while improving speed, latency, reliability, and power consumption for handsets and Internet of Things (IoT) devices. As with the transition from 3G to 4G, there are many uncertainties. Where is the value coming from, and who is going to capture it? What are the use cases where 5G performance enhancements will generate the most value and demand? And which applications will most benefit from 5G?

To provide greater clarity on future value pools for advanced-electronics companies and industrials, we investigated the 5G market through 2030, looking at more than 150 potential business-to-business (B2B) and business-to-consumer (B2C) use cases. We concentrated on 5G use cases related to the IoT in the business sphere, rather than the more predictable market for consumer handsets, because companies are still uncertain about the B2B space. Our findings are captured in a new report, The 5G era: New horizons for advanced electronics and industrial companies; this article is an excerpt summarizing the key takeaways.

An evolving market

Our research suggests that the adoption of 5G will likely happen in waves in major markets. Use cases that require enhanced mobile broadband (EMBB) are likely to reach mass adoption first, followed by those that rely on ultrareliable, low-latency communication (URLLC). A few years after that, there should be an uptick in use cases requiring massive machine-type communication (MMTC) (Exhibit 1).

As new use cases gain traction, it is expected that B2B 5G IoT unit sales will soar. In 2025, more than 27 million units could be sold. We anticipate that most of these—68 percent—will be for use cases that require 5G to achieve distinctive performance enhancements (Exhibit 2). The remainder of estimated sales will occur because companies want to ensure future readiness as 5G becomes the new standard. By 2030, sales of B2B 5G IoT units could rise to about 250 million annually, but the source of demand will probably change. New standard use cases should account for about 82 percent of sales that year, with only 18 percent linked to distinctive use cases.

Of the 45 million units expected to be sold in 2030 for distinctive use cases, about half the demand—approximately 22 million units—likely will come from Industry 4.0 applications. Manufacturing is expected to be a particularly strong driver, with some of the most important distinctive use cases being related to automated guided vehicles, 3-D bin picking, real-time process control, augmented reality, and vision-quality checks.

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