If you plan to be one of the first to own a 5G phone, maybe you’d better start saving up. Samsung, Verizon and AT&T can’t stop talking about 5G’s blazing speeds and instant connection, or how you’ll be able to download the sixth season of House of Cards on Netflix in minutes. But try asking them how much owning one will cost. On that topic, they’re suddenly silent.
5G phones are a hot topic at Qualcomm’s annual tech summit, held in Maui, Hawaii, where Samsung announced it will launch the company’s first 5G phone in the first half of 2019. The new wireless technology is poised to dramatically change the way people use smartphones, once the carriers begin turning on their 5G networks next year.
But change isn’t cheap. Carriers are spending billions of dollars to build out 5G networks while also making their existing 4G networks faster, and carriers and device makers will need to recoup costs when these 5G phones and service plans go on sale.
The shift to 5G also provides carriers and phone makers an opportunity to charge a premium for these top speeds, especially when adding a 5G product or plan can make 4G phones seem cheaper by comparison.
Although neither Samsung, Qualcomm, Verizon or AT&T clearly confirmed that phone and service prices will go up, it isn’t hard to read between the lines.
‘I don’t think you can think about it as we think about pricing today,’ said Kevin Petersen, AT&T’s senior vice president of wireless product marketing. ‘That paradigm has to shift.’
Samsung’s SVP of mobile, Justin Denison, similarly sidelined the question of a more expensive Samsung 5G phone. ‘If you generate enough value [in the phone], then consumers will be ready to pay,’ he said, referring to the notion that 5G’s expanded capabilities will make phones more prized than they already are.
By being clear about a 5G phone’s features — including fast data speeds, very little lag time connecting to the network and crystal clear video calls — Denison thinks that Samsung ‘can be very successful in getting consumers engaged and excited even in the early stages of consumer rollout.’
Verizon agrees. ‘Verizon believes customers will pay for utility and value. There will be that, definitely, in 5G,’ said Nicki Palmer, Verizon’s head of network.
Higher prices for phones and plans may not last forever. ‘The cost increase is not different than the increase in cost that we saw from 3G to 4G, with the benefit that as the technology matures, you can go down on phone storage,’ said Qualcomm’s president, Cristiano Amon.
Amon said that flash storage, along with a phone’s display and chipset (in this case, the new Qualcomm Snapdragon 855) are the three most expensive components. 5G speeds will make it easier to quickly upload and download photo and video content to the cloud, so you may use less local storage.
‘The technology, like everything in electronics, will get cheaper with scale,’ Amon said. ‘And you have to start somewhere.’