The world is on target to pass 1 billion 5G subs by the end of the year in the view of several market forecasts.
This is much faster than the take-up of any previous generation. Recall that the first billion subscriptions took nearly 30 years, and at the time plenty of industry leaders wondered if it would ever get to the next billion.
China's huge 5G population makes up a big chunk of that global figure, and right now the market is displaying a curious trend of fast subs take-up but slowing handset sales.
One of the forecasts, the Ericsson Mobility Report, has had to rework its numbers because for some reason it had decided to count China's "5G package subscribers" – that is, those who have adopted the bigger 5G bundles without upgrading to a 5G device – rather than actual 5G users (see China effect dampens interim 5G subs, says Ericsson).
There's an enormous difference between the two.
Behind the numbers
In terms of the "5G package" statistic so beloved of Chinese telco management, the three operators reported a total of 899.3 million subs at end-May.
They have added 241 million since the start of the year and at this rate will run down the 1 billion mark themselves by the middle of August.
But the real number of 5G users is just over half that – 410 million, according to the MIIT.
That's up from 355 million in December and, taking into account the debut of the fourth operator, China Broadcast Network, as early as this month, China's total should easily pass 460 million by the end of the year.
Presumably the distinction between the two categories will fade as the 390 million package subs gradually upgrade their devices to 5G.
But it may take some time. China's handset market is decelerating at a disconcerting rate – no doubt partly because of the lengthy Shanghai lockdown, but it is also attributable to growing consumer indifference.
"Why won't young people change their mobile phones?" became a hot search topic on the Weibo social media site earlier this week. Many of the posters suggested it was a combination of price and lack of fresh functionality.
China's 5G handset shipments over the first five months were down 20% over 2021 to 86.2 million, according to latest monthly figures from government research arm CAICT. In the same period last year, sales rose 19%.
But the rising coolness to new smartphones is not just a Chinese thing.
Samsung has 50 million unsold phones stacked up in its warehouses, mostly mid-range Galaxy A models, a Korean blog reported last week. That backlog is equivalent to nearly a fifth of its annual target of 270 million and forced it to halve production in May.
In neighboring Japan, finicky consumers are increasingly learning to love used phones.
A survey has found that around nearly 12% of smartphone users are carrying around a pre-loved device – up from less than 2% six years ago. KDDI has been selling repurposed handsets since 2020. NTT Docomo and SoftBank joined the market this year.
No surprise: more than a third of those with a used phone said they had acquired it because of the price.
- China effect dampens interim 5G subs, says Ericsson
- Global mobile network data traffic doubles in two years, Ericsson finds
- China's 5G juggernaut begins to slow down
— Robert Clark, contributing editor, special to Light Reading