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Is 2020 the Year of the 5G Super Cycle?

October 14, 2020

Is 2020 the Year of the 5G Super Cycle?

This time of year is when shippers and carriers around the globe begin to prepare for the peak shopping and shipping seasons, and the mobile device industry is no different. Typically, the holiday season marks an increase in smartphone and mobile device sales, and shippers and carriers usually rely on freight forecasting and demand sensing to manage inventory and resource availability.

However, this year, a 5G “super cycle” may be brewing, exceeding the traditional forecasts. In addition to the general increase in online shopping we’ve seen this year — Adobe Analytics measures online sales in April and May of 2020 to be 7% higher than they were in the high-sales months of November and December in 2019) — new 5G networks continue to light up across the globe, 5D devices are becoming more widely available, and businesses are demonstrating new industrial, automotive, medical, and educational use cases for the technology. These factors, combined with the rise in remote work due to the coronavirus, have advanced the dominance of 5G technology in the U.S. and some analysts believe this could culminate in a significant rise in the sale of phones, resulting in a super cycle.

If the industry records sales that exceed normal upgrade patterns driven by “my phone is old and/or broken” type needs, it will have many downstream effects. In recent years, consumers have been holding onto their devices for longer before upgrading, which impacts manufacturers as well as wireless network operators, who have fewer opportunities to attract new clients, since changes in carriers typically happen at the time of device upgrades.

But after years of competition cooling off, access to 5G is an incentive to upgrade. The flashy 5G ad campaigns coupled with the promise of better connectivity in a world that’s increasingly reliant on remote work and life may be enough to motivate consumers to make the jump this year or in early 2021. In 2019 5G was available on only about 1% of phones sold, according to the market research firm, NPD Group. This season, that number will be significantly larger.

It appears that the stage is set for a 5G super cycle in 2020, but only time can truly tell. What do you think? Are we going to see a shift this year toward more device upgrades driven by the desire for 5G? Will we see a super cycle like we used to see with new product introductions in the not-so-distant past?
Alex Paskoff

Alex Paskoff

Alex Paskoff, Senior Vice President & Managing Director at Ingram Micro Commerce & Lifecycle Services, joined Ingram Micro in 2000. He has an extensive background and experience in the telecommunications and technology industries for over 30 years. In his current position as Senior Vice President, & Managing Director, he is responsible for overseeing all business activities to ensure they are consistent with the overall strategy and mission of Ingram Micro.
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Alex Paskoff 2020-10-14
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