Depending on which family member you ask, the cell phone is their favorite accessory, activity and possession. The evolution of smart phones over the past decade, coupled with the rise in social media popularity has created a dependency amongst almost all demographics in America. Doesn’t matter whether your Team Apple or Team Android, it’s rhetorical to say that cell phones are here to stay. On the other hand, the Achilles heel of our phones is the connectivity that is available.
The good news is that major players in the communication business (telecom companies, governments, hardware and software firms) have known and been working on this connectivity problem for some time and now are on the cusp of launching the fifth generation (5G) of wireless communication.
Currently, we have been operating in the 4G LTE network. Since 2008, when we transitioned from 3G – 4G, it was pretty huge jump forward. But going from 4G – 5G will be many more times greater and almost difficult to comprehend. 5G will be an entirely new kind of network, designed to connect everyone and everything! Smart Devices, Augmented Reality, Autonomous Vehicles or even industrial machinery. Everything will be connected to the internet. Now, it is estimated that by 2025, 5G will be operating as a standalone entity but for now, we exist in the ‘integration period’ where we will operate on both 5G (where available) and 4G.
The #1 Benefit for consumers will be SPEED. It is estimated that download times and web browsing will be 100x faster. You’ll download a movie in 10 seconds instead of 10 minutes and stream live TV from your phone in a crowded airport. The trade-off for extra speed is less range. 5G will survive off many small cell towers in close proximity to each other and unfortunately, that will take another 3-4 years before the infrastructure is complete, hence why we will be in the integration period until 2025.
The #2 Benefit is response time. In the industry they refer to it as ‘Latency’ which is defined as the time it takes to send info and receive information back. With 5G, the communication between devices will be instantaneous, allowing for 100% connection with no lag or glitching. This is the ideal situation for an idea like autonomous driving. Low latency will expand & transform work practices and production in industries like healthcare, transportation, manufacturing, gaming, retail, business and education.
The 5G revolution will undoubtedly change the connected world as we know it and many will benefit. Everything from microchip makers (Nvidia, Skyworks Solutions Advanced Micro Devices), to cell phone companies (Apple, Nokia, Samsung) and infrastructure providers (American Tower, Crown Castle, AT&T, Verizon, Qualcomm), all should see positive momentum with this the new technology, in the years ahead. So is it an investable thesis? YES! But what to buy and how much is something you and your financial advisor should discuss as it is different for everybody. If you don’t have a relationship like that and would like to discuss this idea in more detail, give me a call!
- Patrick
