[SMM Analysis] the 5G era has officially arrived! Is there an inflection point in the mobile phone market?

SMM 06 June 06 News:

Today, the Ministry of Industry and Information Technology issued 5G business licenses to China Telecom, China Mobile, China Unicom and China Radio and Television. China has officially entered the 5G era.

Earlier this year, Miao Wei, minister of industry and information technology, said in an interview that the state would issue 5G temporary licences in a number of cities in 2019. Skipping the 5G temporary license and issuing the business license directly is partly due to the impact of the trade war, but on the other hand, it also highlights China's determination to accelerate the development of 5G.

In a previous article, we analyzed whether changes in mobile phone production were related to the upgrading of communications technology. ([SMM Analysis] is the arrival of the 5G era a boost to consumer batteries? Https://news.smm.cn/news/100869849) the final conclusion is that the future mobile phone demand mainly exists in three aspects: the fixed demand of consumers, the transformative breakthrough of mobile phone software and hardware technology and the development of communication technology. Among them, the development of communication technology has significantly promoted the demand for replacement, in the 3G network and 4G network construction of the year, China's mobile phone production has exceeded 20% growth rate.

So will the same phenomenon happen this year, when 5G begins to build on a large scale?

With regard to the 5G application scenario, the Ministry of Industry and Information Technology previously made it clear that about 20% of the 5G facilities in the future will be used for communication between people, and 80% will be used for things and things, things and people, that is, the Internet of things. In particular, the problem of mobile Internet of things communication. The early issuance of the 5G license will greatly promote the suppliers to speed up the investment and construction of 5G, and the commercial plan of each product will appear in advance accordingly.

Source: CAICT,SMM

Observing the changes of mobile phone shipments in China, due to the weakening of consumers' demand for changing phones and the overall saturation of the mobile phone market, the total shipment of mobile phones in the first quarter of 2019 was 76.931 million, down 11.9 percent from the same period last year. Smartphone shipments totaled 73.072 million in three months, down 10.7 per cent from a year earlier. Of these, 73.317 million were 4G mobile phones, down 10.5 percent from the same period last year, and the shipments of 2G and 3G mobile phones were 3.57 million and 45000, respectively.

The acceleration of 5G will lead to the birth of some new aircraft demand. Fu Liang, a telecommunications industry expert, believes that after the issuance of the 5G license, the 5G tariff packages of the three major operators may be officially introduced in July or August. The previous 4G tariff package may be used in the early stage, or part of the 5G traffic may be given away. However, given that licences are already in the middle of the year, operators will focus on building base stations this year, while commercial 5G phones are generally overpriced this year and have little incentive effect on consumption.

IDC released its forecast for global smartphone shipments last month, and IDC put global smartphone shipments at 1.39 billion in 2019, of which 5G phones were shipped 6.7 million, or 0.5 per cent of the total.

As China is the world's largest smartphone manufacturer and exporter, the development of 5G will also affect the speed of the world's 5G mobile phones. According to China's planning for the 5G industry, SMM believes that 5G will have little impact on the overall production of mobile phones in 2019, maintaining the previous forecast of 1.64 billion units. With the maturity of 5G communication technology and the expansion of coverage, the output of 1.65 billion units in 2020 and 1.7 billion units in 2021 can be achieved, and the output growth rate will change from negative to positive in 2020, of which 5G mobile phone production is expected to reach 10 per cent in 2021.

Considering the improvement of 5G mobile phone life ability, the high voltage of lithium cobalt acid battery is the main direction of the development of the industry. At present, Cunninghamia lanceolata, Xiamen Tungsten and other companies have successfully developed and realized the mass production of 4.45V high voltage lithium cobalt acid, which can meet the battery performance requirements of 5G mobile phones.

SMM Cobalt Lithium Research team

Hu Yan 021 51666809

Hong Lu 021 51666814

Ning Ziwei 021 51666780

Qin Jingjing 021 51666828