By Steve Costello
China Mobile targets 5G smartphone price cuts
Wong Hengjiang, vice GM at China Mobile (pictured), stressed that reducing the price of 5G handsets will be “crucial” as it looks to drive scale in the new business.
At the moment, 5G devices have price tags of around CNY5,000 ($725), reflecting both the premium positioning and the cost associated with 5G modem technology. But by the middle of 2020, the operator is looking to reduce this closer to CNY3,000, with an eventual target of between CNY1,000 and CNY2,000 by the end of 2020.
“Only when you get tens of millions of devices, then you can spread the cost of the modem, and reduce the price,” he said.
China Mobile has already put plans in place for the delivery of 5G smartphones, and is working with device makers to help them to accelerate their pace to reach the target.
“It’s not just about the chipmakers competing against each other or the device makers competing against each other,” he said, noting the opportunity for partnerships and new business models to change the way the industry works.
Stating that he has been using a Huawei 5G smartphone for several week, Wong observed that “I think the most important thing is that it’s super-fast”.
He suggested a major change that will come with 5G devices will come from the way content is generated, rather than consumed. “With the upload capacity being improved, there will be an improvement in images and videos,” he said, noting this echoes what was seen when download speeds were hiked.