5G Ecosystem – November - Supply Chain Market Research

Last month we expressed some concern over the slowing rate of growth in 5G smartphones after seeing a 1.3% m/m increase in available or announced smartphones. That trend continued in November with 5G smartphone growth registering only 0.6% m/m in November, and while still up 43.8% YTD, the last two months were the slowest growth months this year, as shown in Figure 8, with unit volume growth falling below trend line, after 5 months of above-the-line growth. We attribute the slowdown to the overall global economic picture, particularly issues in China that have further slowed smartphone shipments. On a more positive note, CPE devices, an indicator of 5G’s adoption in the FWA (Fixed Wireless Access) market, increased 7.0% m/m, the greatest m/m gain all year, which we see as a positive toward the use of 5G outside of mobile networks.
We expect December will see a slight increase in the number of 5G smartphone offerings, but we expect lesser growth in 5G smartphones in 2023, a bit due to the economic conditions noted earlier, and more as the share of 5G smartphones against the total number of smartphone offerings is now over 50%. As that share continues to rise in 2023, we expect more modest growth but will be more focused on the growth in CPE as it is imperative for 5G to become available to businesses and consumers at fixed locations. We believe CPE device growth will be incremental data in forecasting how quickly carriers will deploy 5G as more than just a mobile transport system. It’s expanded use in FWA will encourage carriers to build out additional service points to feed CPE demand and give 5G an additional growth path beyond mobile networks.