Thursday, May 13, 2021

So Far, 5G is Mostly about Entertainment

It is a little hard to determine at this point how the mass market will ultimately find value in 5G networks. Right now most 5G customers, in most markets, remain either innovators or early adopters. The former just want to have the latest thing; the latter typically are looking for some productivity advantage. 


So far, according to Ericsson research, early 5G users have increased engagement with some applications or use cases. Gaming, streaming music and video, virtual or augmented reality app use has increased. 

source: Ericsson 


None of that yet suggests a mass market trend, however, beyond the consumption of more entertainment content. 


Whether mobile service providers do a good or poor job marketing; despite initial coverage or battery life issues; before clear new use cases emerge for most users, 5G adoption eventually will reach more than 85 percent. Every next-generation mobile network has done so. 


Eventually, value propositions will be clear. But there perhaps remains a “crossing the chasm” challenge that has not yet been overcome: we have yet to make the leap from the “innovator” stage of uptake to most “early adopters.” Though 5G adoption has moved into the “early majority” phase in a few countries, globally 5G remains in the “innovator” stage. 


source: Geoffrey Moore 


At least 300 million smartphone users could take up 5G in 2021, Ericsson believes. But compared to global mobile subscriber count of five billion, 5G adoption remains far below one/tenth of one percent. 


Across the 20 lead markets where 5G commercial networks are available, an average four percent of consumers own a 5G smartphone and have a 5G subscription, Ericsson notes. That suggests markets in those 20 countries remain in the early adopter stage, and have yet to cross the chasm into the mass market. 


source: Ericsson


Sales of 5G-capable phones is misleading as well, as perhaps a fifth of 5G phones are used on 4G subscription plans, Ericsson notes. 


With a vested interest in rapid 5G uptake, Ericsson notes some early behavioral changes, but also suggests consumers are still waiting for viable new use cases and value. 


“5G users spend two hours more per week using cloud gaming and one hour more on augmented reality (AR) apps compared to 4G users,” Ericsson says. Some  20 percent say they have decreased their usage of Wi-Fi usage after upgrading to 5G. 


But indoor coverage limitations and a lack of compelling new use cases inhibits consumer uptake, Ericsson says.


Some 70  percent of consumers polled on behalf of Ericsson say they are dissatisfied with the availability of innovative 5G services and expect new applications making use of 5G.


One possibly important caveat: satisfaction metrics for 4G and 5G occur across very-different market segments. At this point, 4G is used by nearly everyone in mature markets. 5G serves an innovator or early adopter customer in most markets. Those customer segments have very different expectations. 


Innovators seek out novel technology; it’s like a hobby for them. Value, price and ease of use are not very important. Novelty is the driver: “it’s new.”


Early adopters, though quick to understand the benefits of new technology, do not value technology for its own sake. They value what new technology allows them to accomplish. In most markets, we are still in the early adopter stage. Already, though, value has become a more-important driver of adoption. That is likely why “what can it do for me?” has become something of a barrier to faster adoption. 


The early majority customer, in contrast, is practical. If a product seems useful, they will try it. But value has to be clear. Also, this type of customer will not tolerate “difficulty of use.” The technology has to be easy to use. And by this point, value--and therefore price and terms of use--matter. 


Late majority consumers are not confident in their ability to deal with technology and often buy from big companies, only after people they know use new products. 


Laggards are those consumers who, for personal and/or economic reasons, are not looking to buy new technology.


That likely accounts for the amount of interest in “innovative” features and use cases those surveyed on behalf of Ericsson express. 


The survey identified five jobs or outcomes that consumers hope 5G will accomplish:

  • To be productive and efficient

  • To be creative

  • New ways of connecting and socializing

  • The need for novelty (thrill, surprise, discovery)

  • Rewarding me-time.


All that suggests there is yet work to be done in creating clear new use cases of value for most people. 


source: Ericsson

 

No comments:

Agentic AI Could Change User Interface (Again)

The annual letter penned by Satya Nadella, Microsoft CEO, points out the hoped-for value of artificial intelligence agents which “can take a...