The Real 5G Winner Could Be China

The technology industry is counting on fifth-generation wireless, or 5G, to be the next big growth driver for all kinds of new products, from phones and chips to software and sensors. But 5G remains an unorganized idea, and the short-term advantage is no longer quite so clear.

The tech industry expects 5G to deliver speeds 10 to 40 times faster than current 4G LTE networks. Advocates expect its lower latency and data-rate capabilities to drive a new era of applications. But Wall Street analysts are suddenly questioning the rewards.

This past week, Goldman Sachs analyst Rod Hall wrote that 5G wouldn’t offer much to consumers by 2020. That’s when Apple is expected to release its 5G-enabled iPhones. “5G is a brand, not a feature,” Hall wrote to clients. “We do not believe that 5G offers consumers much in the way of additional utility .” He thinks that other 2020 iPhone features—augmented reality, a new design, and an improved camera—will prove more important to consumers.

China’s 5G buildout. For instance, Rosenblatt Securities notes that local governments in the Asian country are providing subsidies to “speed up 5G network deployments.” As a result, Rosenblatt says, more than 300 cities in China will have 5G networks by the end of 2020. Even Hall, the Goldman Sachs 5G skeptic, expects 120 million 5G smartphones to ship next year, mainly because of China’s aggressive buildout.