No 5G Phone? China May Count You as 5G Anyway

For several months, I've been reporting that the 5G "subscriptions" at Chinese telcos added up to much more than the total of 5G phones. China Unicom has now confirmed that they are counting as "5G" many people who are using 4G gear. 

The discrepancy should narrow because half a dozen decent 5G phones cost between US$197 & $280. The monthly cost for a 30-gigabyte service at China Unicom just fell 30% to 88 yuan, about US$13.

China Mobile claimed 55,000,000 "5G packages" at the end of May. China Telecom has more than 20,000,000 and China Unicom won't say. The number of actual 5G users end of May was probably ~50,000,000 among the three carriers. MIIT released a figure of 36,000,000 for the end of April and 15,000,000 5G phones shipped in May. Even the reduced Chinese figures are twice the total in the rest of the world.

China's 5G lead remains enormous. China Mobile at the end of May had 140,000 5G bases. China Unicom and Telecom are sharing 130,000. They are building over 10,000 per week. That is far more than twice the total 5G sites in the West. 

MIIT has restored the original goal of 600,000 in 2020 and expects 180,000,000 phones to ship. China Mobile and the China Telecom/China Unicom team will each do 300,000, with China Broadcast likely to add more by the end of 2020.. 

 

UNISOC/Ziguang Zhanrui & Hisense: YA 5G competitor

UNISOC is now shipping the T7510 5G, putting more downward pricing on chips. The Hisense F50 is in limited production with that chip, sold out on jd.com but presumably more available soon.  (Announcement below.) 5G phone prices are dipping below US$200, although Hisense is currently pricing at $500. See 5G phones fall to US$192, raising 2020 estimate to 210 million

Both companies are state-backed and hence have the resources to continue in the current tough market. UNISOC (formerly known as Spectrum) is part of Tsinghua Unigroup, which has received billions of state funding. It once had a production deal with Intel but is now on its own.

Hisense is a US$35 billion company and one of the world's largest makers of TVs (pictured,) refrigerators, and air conditioners. It goes back to 1969 and was one of the first to import foreign technology in the 1980s. It's been a modest producer of phones and hopes to continue into the 5G era.

15 million 5G phones shipped in China in May, 46% of the rebounding market.  

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5G phones fall to US$192, raising 2020 estimate to 210 million

The Huawei Honor X10 5G, pictured, sold out almost immediately at the US$147 price, But the Xiaomi K30 5G was still on sale at US$192 as I write, down from US$228. Oppo, Vivo, Realme, and ZTE all have models under US$280. These are fine phones, about 6.5" and with 3 or 4 cameras. (618 is a special sales holiday at jd.com and Alibaba. Prices tumble and sales are many billions. Amazon's "Prime Day" is a copy.)

13 phone makers are fighting for a market that can only really support 4 or 5. Xiaomi set off the price with a US$285 announcement in December, one reason I put out the 210 million forecast, twice as high as most others. Even the most aggressive didn't expect prices of $200-250 before late in the year. 

Component prices have been tumbling. MediaTek and Qualcomm have been slashing prices on their new mid-range 5G chips, while UNISOC/  is now also shipping chips. BOE in particular has a massive capacity for screens. Qualcomm has new RF front end components, forcing the traditional RF vendors to fight for market share. Sony has a billion-dollar camera plant that must keep busy. 

5G, disappointing in the West, is exploding in China. 15 million phones in May, 10,000 bases upgraded per week, price dropped from ~$18 to ~$13/month. China almost certainly will hit its 2020 goal of 150 million. The 5G iPhone with 5 nm processor going into production in July, should be a big seller in U.S. late in the year. 

ARM X1 Means Faster Wireless Chips Yearend (First look)

"Impressive" is Linley Gwennap's comment on the new ARM Cortex-X1 design that will appear in top chips late in 2020. The target is "a 30% gain in per-clock performance (IPC)." Nearly all mobile phone processors are built around ARM designs, from Apple to Huawei. 

TSMC already is producing millions of 5 nm chips for this year's iPhone and probably for Huawei as well, The advanced process reduces energy, heat, and chip area. That allows ARM to design a larger but more robust chip.

Chips with the X1 design will benchmark 5-25% higher, with an additional boost from the 5 nm process. Speed like this is great marketing and good for gamers, but makes little practical difference for most of what we do. The same is true of 5G itself; very few practical applications can use more than the 75 Mbps common in 4G.

Linley is one of the best chip analysts in the world, someone other experts turn to when they need help. You definitely should subscribe to his free newsletter at https://bit.ly/2XMN9Xb

 

Apple 5G "Incredible." (Informed opinion)

Skyworks CEO Liam Griffin may already have an Apple 5G phone. (Production is beginning, although the big ramp is late. Some July-August chip orders have been delayed two or three months. ) 

"The 5G performance is going to be incredible. Consumers are going to line up to get it. It's going to be the biggest incremental performance change that we've seen in cellular." [mmWave 5G will often be a gigabit. However, mmWave will be a minority of locations. Low-band "5G" will be slower than decent 4G. ed]

Skyworks, a $15 billion chipmaker, is the key supplier of the front end radio parts for Apple. Just about everything on the phone except the camera and the display has to work well with the radio front end, so he's been briefed in depth.

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Biggest Chip Tool Maker May Produce in Singapore to Evade U.S. China War

Gary Dickerson, CEO of Applied Materials, pointed out to investors they might assemble their equipment in Singapore to evade fallout from U.S. sanctions. China is the largest purchaser of chip gear today and has committed over US$100 billion to chipmaking. The world #1 foundry, TSMC, doesn't want to lose orders from Huawei, which buys about $5 billion each year. I'm sure it would prefer that Applied sells it Singapore gear. TSMC needs more flexibility to respond to whatever comes next from the U.S.

Dickerson is confident the U.S. rules will have "minimal impact on our business." His CFO, Dan Durn, added, "We think there's a path forward on this based on our discussions with the ecosystem where it doesn't impact our expectations around the business."

Sensible businessmen from Europe to California are finding ways to protect their businesses from current and possible future U.S. restrictions.

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The Big Backbones: Level 3, Orange, AT&T

Verizon used to claim "half of all Internet messages pass through our network." That's unlikely today, as several carriers have networks as global as what Verizon built after acquiring UUNet. There are many ways to measure size of backbone providers, but this chart from Telegeography is highly suggestive. Level 3/CenturyLink, Orange, and AT&T most frequently offer Direct Internet Access in165 global metros. Cogent, Sprint, Tata, and Deutsche Telekom also are found in more places than Verizon. NTT and BT follow. 

Their colleague, Brianna Boudreau, separately looked at the trend in international bandwidth costs.  https://blog.telegeography.com/global-bandwidth-prices-are-converging-somewhat 

      "Across critical global routes, weighted median 10 Gbps and 100 Gbps prices fell an average of 14% and 23% compounded annually since 2016. ... 100 Gbps cost 4.3 times 10 Gbps while delivering 10 times the capacity."

Huge disparities continue. 10 Gbps from Los Angeles to Tokyo (5500 miles) costs ~US$5,000. Los Angeles to Sydney is about 40% further (7500 miles) but costs more than three times as much.  I've reported the disparities to Africa are even higher; the cartel-like pricing of transit and backhaul is the largest international factor in high African Internet prices.

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Canada Caves to U.S., Blocks Huawei 5G (Inference)

Huawei is the strong favorite of Canadian network builders, for good products and extraordinary support. It displaced the incumbents at Bell Canada years ago and has a joint "Living Lab" in Vancouver with Telus. Huawei had already won the 5G contracts. It has a thousand researchers and spends a quarter billion dollars on Canadian R & D. 

It was a government decision. Bell Canada told the Canadian Press, "Huawei has been a reliable and innovative partner in the past and we would consider working with them in 5G if the federal government allows their participation."

I infer that the Telus and Bell decisions to block Huawei from 5G is a political decision made under pressure from the U.S. Canadians are insulted by the many Americans who think Canada is effectively ruled by the U.S., but Canada is deeply dependent.

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