Last week, I went to Mobile World Conference in Shanghai. Which of course was great because Shanghai is always great. And I got to see all the latest telco and mobile infrastructure stuff.
I also got an update on Huawei’s carrier and 5G projects, including visiting their 5.5G R&D center in Pudong. That was pretty great, and I’ll summarize that in Part 2.
For part 1, I want to summarize rotating Chairwoman Sabrina Meng’s talk about 5G strategy. It was really informative, and I had 4 main take-aways. But first a couple of general comments on 5G.
The Roll-Out and Embedding of 5G Is Continuing. This Is Really Important.
We are now about four years into the commercial deployment of 5G. China has the biggest adoption for 5G of course. According to the CEO of China Mobile, there are +630M 5G users in China. That’s about 60% of users. And there are about 4.7M base stations.
And now that the 5G launch hype has died down, we can actually see what is real and what didn’t play out as predicted.
5G hasn’t had a big bang like we saw with 4G. There was no hot use case. Virtually and augmented (which was a cited use case for 5G) reality didn’t take off either.
The roll-out and adoption for 5G has been quieter. Sort of slow and steady. But it’s really important. 4G was about a big advancement in communications, especially for video on smartphones. But 5G is about connecting the real world. It’s about connecting industry and society, not just communications. It’s a much bigger deal. And really something we have not seen before.
But this is happening slower than the big surge we saw in 4G, which was much more of a B2C story. It is also mostly happening behind the scenes. In factories. In businesses. 5G is mostly a B2B and B2G story, not B2C.
The impact of 5G is dependent on the rate of digital transformation by businesses. They have to embed it in their products, production, and workflows. That takes time. Someone once told me that B2C mobile apps are like catching lightning in a bottle. It happens very fast, but it’s unpredictable. Think YouTube and WhatsApp.
Digital apps in B2B are more like mining. They take a lot longer, but they’re much more predictable. You know the gold is there. It just takes a long time to get it out. Lightning in a bottle vs. mining is how I see 4G vs. 5G.
Ok, let me get to the talk by Sabrina Meng.
Huawei Rotating Chairwoman Sabrina (Wanzhou) Meng gave a good keynote to open the conference. This was the first time I had heard her give a detailed strategy breakdown, instead of more high-level comments. It was impressive and I’ve included the slides, which are quite detailed.
She cited 4 use cases for 5G. Here are my take-aways on them.
Take-Away 1: 5G Enables Experience-Based Shopping. This Will Be a Significant Shift in Consumer and Merchant Activities.
Shopping offline and online have traditionally been about merchants and brands identifying and serving consumer “wants” and “needs”. Consumers “need” milk and socks. They “want” lattes and entertainment. Merchants have positioned their business models against such transaction-focused interactions.
However, with 5G, shopping is becoming more of an interactive experience. It’s less about meeting clear consumer intent and more about providing compelling experiences. 5G is going to enable richer and more ongoing experiences. It is going to be more about interactions between consumers and merchants that are not just transactions.
This is going to be a challenge for merchants and brands. How can they provide value beyond just a transaction around a want or need? They might need to provide information. Maybe entertainment?
5G capabilities are likely going to change shopping behavior and business models. Merchants will have to change their activities. For example, merchants and brands have traditionally gone for scale in transactions. Then they used this scale to enable big marketing spending. Scale plus big marketing spend was used to drive purchasing.
However, if shopping is shifting more to interactive experiences, then merchant will need to focus more about the quality of their products and experiences. That, plus word of mouth on social media, should drive purchasing more and more over time.
It’s an interesting idea. Here are Sabrina’s Meng’s slides on this. However, this summary is my own assessment and language, not hers.
Take-Away 2: 5G Enables Interactive Entertainment Everywhere. Think Ubiquitous Video Screens.
This is the 5G consumer use case I believe in. This is basically like the movie Minority Report, where Tom Cruise walks around the city and there are video screens absolutely everywhere. On all the walls. On buildings. On the trains and walkways. And these ubiquitous screens are interactive. They see him and start to communicate with him as he passes. They ask him questions. They try to interact with him and sell him products. And he can interact with the screens and whatever is on this.
This is the 5G use case you can see coming. Given its fast download and upload speeds. And big bandwidth. You can basically fill the physical world with such interactive screens. People call this immersive entertainment. Or immersive reality.
Basically, I see it as the digital world invading the physical world. It could happen with augmented reality classes and virtual reality one day. Who knows? But it will definitely happen through video screens with high-speed connections that are everywhere. And on these screens, I think short video and livestream will likely be as popular as on smartphones.
Sabrina also mentioned upgraded social media as 5G use case. That makes sense but is pretty vague. Yes, 5G will enable much faster video and more interactive entrainment. This should enable new types of social media to emerge. But it’s not clear what these are yet. And everyone seems to be waiting for new social media apps to emerge.
Take-Away 3: 5G Will Digitally Transform Manufacturing and Production. This Is the Most Important Use Case.
This is the use case I most believe in. This is the big gun. This is embedding robots, IoT, sensors, camera, and automation into every factory. All enabled by 5G connectivity to the cloud. And it’s not just going to happen in factories. It will happen in every type of production of products and services. So yes, factories. But also, production of digital content, like movies and television. We’ll see it in the production of services, like hotels and restaurants.
Sabrina referred to this as 5G2B, a play on B2B.
- It involves embedding 5G into products. So smart refrigerators, smart drones, and smart underwear. That actually happens pretty fast. Philips makes smart and connected toothbrushes.
- But more importantly it means transformation of manufacturing and production processes. In practice, that means 5G plus cloud plus AI. Using IoT. Everything from industrial robots in factories to drones doing maintenance checks on skyscrapers and rooftops. The digital transformation of production is powerful. But, as mentioned, this takes a long time.
Note: You get different benefits from the digital transformation of production depending on the industry. It’s not just about being cheaper. You can get increased quality, improved safety, higher production rates, etc. The one benefit that Sabrina mentioned was “flexible production”. I assumed this was about being able to make different types of products easily. But I think it is also about being able to dynamically deploy assets for different tasks. Here is a little model Huawei had at their office that shows how this could work in practice.
Take-Away 4: 5G Will Transform Transportation. This Will Take a Long Time.
We can see the robotaxis doing trials in Beijing and other places. We can see autonomous buses operating in business parks. We can increasingly see autonomous cars on the streets of the US.
But those are mostly about artificial intelligence. An individual Tesla can see the road and make decisions.
5G is about creating real-time connections between increasingly smart vehicles and increasingly smart infrastructure. A smart car can navigate the road on its own. A 5G enabled smart car can connect with all the other cars, the roads, the streetlights, pedestrians, the parking lots and so on. This is where the low latency of 5G is making a difference. And transformed transportation is starting to become a story of digitally transformed cities.
We can see this playing out in China. But, like manufacturing, it takes time. In this case, it depends on the deployment of smart infrastructure in cities. And it depends on lots of regulatory approvals.
That’s it for Part 1.
Now that the dust has settled with 5G deployment, we can definitely see certain use cases happening in practice. My summary is:
- Manufacturing and production is the most important 5G use case.
- Transportation is an important 5G use case but very slow.
- Ubiquitous interactive entertainment is the coolest.
In Part 2, I’ll go into 5.5G.
- Huawei Launches 5.5G and 3D Laptops at the Shanghai Mobile World Conference. (2 of 2) (Tech Strategy – Daily Article)
- Can ByteDance Breach Alibaba’s Infrastructure Moat and Become An Ecommerce Giant? (Tech Strategy – Podcast 82)
- Alibaba Takes Over Sun Art Retail. Is It Going to Take Off? Or Is It Infrastructure? (pt 1 of 2) (Asia Tech Strategy – Daily Update)
- Could Sun Art Grow +30% Under Alibaba? (pt 2 of 2) (Asia Tech Strategy – Daily Update)
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