Consumers willing to pay 20 per cent premium for 5G smartphones: Ericsson

While major smartphone brands have invested in phones that support the next-generation 5G network – even ahead of its commercialisation phase – responses from consumers may offer some comfort to support those investment decisions, with a new Ericsson survey finding that average phone users are willing to pay a 20 per cent premium for 5G.

Among the group of early adopters of smartphone technology, half say they are even willing to pay as much as a 32 per cent premium for the 5G devices even though wide adoption of the network won’t officially kick off until next year, according to the report released on Tuesday.

However, higher internet speed alone won’t be enough: four out of 10 of the big-spenders expect new apps and services from their 5G plan, according to Ericsson, a Swedish 5G equipment vendor that competes with global peers including China’s Huawei Technologies and the Finnish Nokia Corp.

5G smartphone shipments are expected to expand 255 per cent by 2021, almost reaching 110 million units, according to a research note from Counterpoint issued on April 16. The researcher expects growth to be slow during the initial commercialisation phase in 2019, but sees an uptick in sales once countries shift from non-stand-alone to stand-alone 5G infrastructure.

“There are still forward looking 5G standards that are unconfirmed, creating uncertainty around product and service opportunities. We also expect 5G chips to have a higher price point which will initially drive the cost of devices up. 5G capable devices will be premium only in the beginning,” Counterpoint research director Tom Kang said in the report.