Fifth generation cellular network technology moves beyond the handset to next-gen manufacturing and self-driving cars
The coming of 5G is a game-changer, but not in the way people expect
Smartphone users worldwide have long-awaited the arrival of fewer dead spots and download speeds up to 20 times faster. Potentially far more significant is the capacity for 5G to unlock the full power of the 30 billion Internet of Things (IoT) devices expected to be connected by 2030. Analysts estimate that by 2035, the 5G value chain will drive upwards of USD 3.5 trillion of new economic output, supporting 22 million jobs. To make this projection a reality and justify the necessary investment, the electronics industry must tap into the full potential of 5G beyond the handset business.
One fact about 5G most everyone agrees on is that it won’t come cheap
Between 2020 and 2035, analysts estimate the collective annual investment in research, development and capital expenditures by network equipment firms, telecommunications companies and governments within the US, China, Japan, Germany, South Korea, the UK, and France will average over USD 200 billion. Estimated investment sums are enormous compared to the size of the industry. In contrast, the global revenue for mobile network operators (MNOs) was USD 1.4 trillion in 2017. Although investing in 5G will happen over many years, shared across MNOs, electronics sector companies and government entities, the investment needed is huge. Smartphone revenues alone aren’t enough to justify it. However, the expanded value net will benefit and contribute to the investment.
The telecommunications industry, alongside network equipment providers (NEPs), must look for growth using software as the differentiator in a broader set of use cases across industries. This includes apps, analytics, and bespoke software designs that address-specific user needs. For example, artificial intelligence (AI)-enabled manufacturing, edge-specific decision making for transportation-as-a-service, and augmented reality that can assist with everything from utilities repair to construction trade work. In many cases, AI-capable chips will enable edge applications. Chipset providers will likely address both hardware and software for IoT devices, enabling decisions to be made closer to the device instead of sending it to the cloud.
It doesn’t mean that the cloud will disappear, but more processing will be done locally, at the device level. Just as the Apple iPhone X face recognition happens on the phone itself, not the cloud, edge will require adjudication rapidly at the point of impact.
5G is inherently more flexible and scalable than its predecessors
The way 5G networks are built allows them to be configured in virtual slices of network capabilities that can be used as needed for more speed, dedicated capacity, and throughput. This enables lower latency. Each virtual network can operate independently, controlled and configured for user-specific needs, without creating a new physical network. Software defined networking (SDN) architecture makes network controls programmable, while virtualization allows the underlying infrastructure to be abstracted for applications. Orchestration instructs which protocols and processes to invoke, and in what order. 5G technology has to deliver in three vital modes: Enhanced Mobile Broadband (EMBB), Massive IoT (MIoT) and Ultra-Reliable Low Latency Connectivity (URLLC).
Meet the authorsMartin Kienzle, Electronics Industry Leader, IBM Research
Rami Ahola, Global Leader, Electronics Industry Center of Competence
Mike Edholm, Business Development Executive, Member IBM Industry Academy
Cristene Gonzalez-Wertz, Electronics and Environment, Energy, and Utilities (EE&U) Research Director, IBM Institute for Business Value
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