Why Apple spent billions to get to 5G — services

The combination of fast mobile broadband and powerful hardware underpins a services opportunity we’ve not really begun to scratch.

Apple, iOS, iPhone, iPad, 5G, mobile, networking

Carriers are ramping up their 5G infrastructure even as Apple has introduced iPhones that support the standard. Data speeds are rapidly improving as the infrastructure falls into place for high-bandwidth services, new connected hardware, and more.

No wonder Apple spent billions to climb aboard.

We’re nowhere near peak 5G

We aren’t anywhere close to peak 5G — many nations have little to no 5G broadband infrastructure and those that do may not yet be able to deliver consistent coverage. You can’t yet rely on finding a 5G connection outside of specific conurbations. Different nations and networks support different generations of 5G, with new ones coming online and additional wireless spectrum slowly being made available.

But overall, deployment is moving in the right direction.

OpenSignal offers a glimpse at the state of play. Its data reveals that download speeds have nearly doubled in 5G markets. In Germany, download speeds accelerated form 22.6Mbps to 48.7Mbps; in Saudi Arabia (a nation investing deeply in smart cities, Industry 4.0 and IoT), speeds went from 13.6Mbps to 31.1Mbps. Some nations, principally in the APAC region, are storming ahead: South Korea hit 129.7Mbps.

Those nations in which 5G services are delivering the fastest connection speeds are ripe for service evolution. Why work in an office when you can grab your iPad Air (soon with 5G) and work under a tree? The combination of fast mobile broadband and powerful hardware underpins a services opportunity we’ve not really begun to scratch.

The services opportunity

As so often in the evolution of the internet, games show the way. South Korea has become the best place to play them based on internet speed, the researchers said.

It’s worth thinking about what games are. The most advanced games can be seen as high-bandwidth, mobile services, which means nations that support the best gaming experiences should also be able to handle the most advanced next-generation enterprise services.

They should also be able to tolerate exciting new ideas, such as Augmented/Virtual Reality on the move, semi-autonomous vehicles, smart roads, and connected city infrastructure.

The OpenSignal report also looks at network congestion. It notes that those nations in which 5G has become more available have also become more capable of handling high quantities of traffic.

The evolution of companion technologies, such as SDN (Software-Defined Networking), NFV (Network Function Virtualization) and network slicing also help reduce congestion, particularly for remote enterprises reliant on high bandwidth mobile services.

“Vendors have promised for years that 5G would enable augmented reality (AR), edge computing, multiplayer gaming, industrial automation and a myriad of Internet of Things (IoT) use cases,” the Open Signal report says. “But these gradually progressing 5G standards explain why the full 5G impact has not arrived and vendors’ 5G claims are often still to be met.”

New markets will open up

While the benefits of 5G seem promising today, as the infrastructure evolves and additional spectrum is made available, the full extent of the opportunity will emerge. That opportunity may become most visible in developing markets.

Africa, for example, is widely regarded as a huge economic opportunity that's been held back by the lack of broadband infrastructure. A combination of satellite, fixed-line broadband and 5G may enable large parts of the continent to be bought online.

The continent is hungry for this. As of 2015, around two-thirds of Africa’s population owned mobile devices. And mobile broadband speeds have accelerated in almost every African nation since 2019, as operators deploy 5G or increase 4G availability ahead of a 5G launch.

But the ability to provide broadband speeds to Africa will be equally essential to communities in any nation that have not yet gotten fixed-line broadband. Across the US, at least 6% of the population lack access to fixed broadband services. While most of these areas must also wait for carriers to put 5G in place, there is at least a little hope to get them online.

Apple sees an early benefit

When the first 5G services were switched on in 2019, Apple’s critics rushed to slam the company for being “late” to adopt the standard in its devices. However, all (?) the company had to do was hand Intel a billion dollars for its modem development tech and reach an out-of-court settlement with Qualcomm to introduce the first 5G-enabled iPhones just a little later in 2020.

The iPhone 12 became the world’s best-selling 5G smartphone, despite the pandemic. Carriers got firmly behind Apple to get those smartphones to market as they sought to get customers hooked on 5G. That device counted for 24% of all 5G phones sold globally in 2021. The iPhone 13 is maintaining this momentum, with billions of people still to upgrade and it's become tool of choice for enterprise professionals.

Apple may lead today, but Samsung, Lenovo, OnePlus, Xiaomi, and others are also benefitting as the standard rolls out. Apple has evidently put a great deal of effort into preparing to exploit the emerging 5G opportunities — think how its consumer-focused services can so easily exploit mobile. It is also allegedly on the cusp of introducing new hardware categories (cars, glasses, wearables) that simply wouldn’t be possible without mobile broadband to link them up.

I guess that's why Apple spent so much money ensuring it could put 5G inside iPhones, iPads, and, one day, Macs.

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Copyright © 2022 IDG Communications, Inc.

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