Consumers do not care about 5G mobiles

For several years there was a market rule that consumers wanted to change their mobile phone as soon as possible: to get a device with a more powerful processor, greater autonomy, better photography or additional technical features that ensured higher internet browsing speeds. Things have changed at the latest since the mobile phone operation is no longer in the spotlight, but mainly the quality of the camera. Mobile manufacturers are hoping to boost demand with 5G, the next generation of mobile internet connection with faster speeds and more reliable connections.

The new generation of connections, however, does not seem to excite consumers, according to a report by credit insurance giant Euler Hermes and parent insurance Allianz. The authors predict that in the coming years the turnover of the mobile market will shrink by about $ 134 billion.

70% of 5G mobiles worldwide operate in China

The biggest companies such as Apple, Samsung and Xiaomi are not at greater risk, but mainly the smaller ones. Milo Boghertz, head of Euler Hermes, explains: “Europeans today are replacing their mobile phones with a new one every 40 months. In 2016 this period was 25% longer. In the US consumers buy new mobile phones after just 2 But here too, the period has been extended by 30% compared to 2016. According to analyst Orlene Ditua, “by 2025, more than 130 billion euros are at risk globally.

Developments in China, which for years has surpassed the US in digital economy innovations, are considered indicative. In the communist, vast country, 70% of the fifth generation mobile phones sold worldwide are now in operation. According to a report by Euler Hermes, almost 30% of mobile phone owners have a model with 5G technology. The remaining 70%, however, do not seem to be in a hurry to buy mobile phones with fifth generation connections, technologically replenishing the lost ground. And this in a country where mobile phones are widely used for almost everything: from payments, communication with public services to social life and contacts between citizens.

New technology does not excite potential buyers

Despite the fact that three of the four mobile phones sold in China last year had 5G, exports of Chinese new technology mobile phones to international markets are considered disappointing, as they do not exceed pre-pandemic levels. They are currently at a lower level than 2019 and are limited by 30% compared to 2016.

The report makes it clear that 5G technology will not boost turnover as much as mobile phone makers had hoped. The new generation of mobile connection, which has not been spread except in China, “will not break the record of mobile sales,” estimates Orliean Ditua. According to Euler Hermes / Allianz, “the new generation of mobile phones lacks a technological feature that will appeal to consumers.” In other words, the manufacturer who will be the first to launch a new innovative technology can count on a significant increase in its share.

Dirk Kaufman

Edited by: Stefanos Georgakopoulos

Source: Deutsche Welle