Following the launch of a new chip by Qualcomm to bring down the cost of 5G smartphones below Rs 8,000, an analysis by Techarc suggests that the same will lead to migration of 156 million feature phone users to 5G by 2030.
“Between 2024-2030 period, we estimate the 5G widening into sub $99 segment to add $13 billion cumulatively in revenues for the smartphone industry,” the research firm said in a note on Wednesday.
On Tuesday, Qualcomm launched Snapdragon 4s Gen 2 India-specific chipset, which will for the first time enable mobile phone companies to launch 5G smartphones in the below Rs 8,000 segment.
Even as Qualcomm is in touch with all the smartphone makers to integrate the chipset for affordable 5G devices, Xiaomi will be the first brand to adopt the chipset and announce the device by 2024 end.
“Beginning 2025, we expect to see 2-3% contribution of the smartphone revenues in India coming from 5G smartphones sold in sub $99 segment. During the period our analysis suggests there could be addition of 17-32 million subscribers every year to the 5G smartphone base,” said Faisal Kawoosa, chief analyst at Techarc.
According to Kawoosa, this is the third attempt where the ecosystem is trying to do something for the below Rs 10,000 segment and is fundamentally technology driven than business and finance.
Among challenges pointed by Techarc for adoption of sub-Rs 8,000 5G smartphones is the competition from the second hand smartphone market.
“Smartphones selling in the Rs 15,000-20,000 range in first hand markets will be available in the Rs 5,000-8,000 range in a couple of years from now. Many consumers will prefer them because of having better specifications than what we are expecting in sub $99 5G smartphones developed using Qualcomm 4s Gen 2 and other equivalents that other chipset makers will offer in future,” the research firm said.
Besides absence of 5G usecases and increase in mobile tariffs, among other things could also slow down the migration of 2G users to 5G smartphones.
According to Techarc, smartphones being offered in the Rs 7000-8000 range will not drive huge adoption. Gradually, the price should come down in a couple of years to the Rs 5,000-6000 range, which can drive volumes and faster adoption.
