Why are 5G phones not selling as well as 2G phones in China?

Recently, the China Academy of Information and Communications Technology released a report on domestic mobile phone sales in August 2019. The report shows that in August 2019, the total shipments of the domestic mobile phone market were 30.875 million units, including 1.177 million 2G phones and 219,000 5G phones. This comparison has caused some netizens to discuss: In 2019, which is known as the first year of 5G commercial use, why is the sales volume of 5G phones, which are hailed as the new darling of the industry, only 1/5 of the sales volume of 2G phones, which are "old-fashion phones"?

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The Ministry of Industry and Information Technology officially issued 5G commercial licenses this year. Domestic mobile phone manufacturers such as Huawei, Xiaomi, and ZTE have launched new products since June, but 5G mobile phones have not ushered in the wave of enthusiasm that some people expected. According to statistics from the China Academy of Information and Communications Technology, from January to August 2019, the total shipments of the domestic mobile phone market were 251 million units, a year-on-year decrease of 5.5%, including 10.492 million 2G mobile phones, 58,000 3G mobile phones, 240 million 4G mobile phones, and 291,000 5G mobile phones. Among them, the 219,000 5G mobile phones sold in August alone accounted for the vast majority of sales in the first eight months of this year.

"For ordinary users, 5G services and 5G phones currently lack practical uses," communications expert Ma Jihua told the Global Times on the 9th. Most of the users who have purchased 5G phones and have actual needs are R&D personnel, whose purpose is to conduct related tests and development of 5G networks. In addition, it is mainly some technology enthusiasts who will buy them. "In fact, the low sales of 5G phones are mainly due to the fact that manufacturers have relatively few shipments and there is no large-scale sales. They are just trying to seize the opportunity," Ma Jihua added.

Many analysts have mentioned that domestic 5G base stations are still in the stage of large-scale deployment, and there are not many areas where network coverage is achieved. Taking Beijing as an example, data from the Beijing Municipal Communications Administration shows that as of the end of July, 7,863 5G base stations have been completed and delivered, and operators have opened 6,324 5G base stations. Such a density obviously cannot guarantee that users can use 5G services stably.

Ma Jihua analyzed that the outbreak of 5G mobile phones requires a process, which mainly depends on when the mobile phone has applications that can only be used with 5G. Previously, applications such as WeChat, taxi-hailing, and navigation have driven users to replace 4G mobile phones. It is expected that the sales of 5G mobile phones will accelerate by the end of 2020. According to a recent forecast by Strategy Analytics, an international industry research organization, the sales volume of 5G devices accounted for less than 1% of the total sales in 2019, and by 2020, the share will be close to 10%. "Globally, the high price of 5G mobile phones is the biggest concern of early consumers. Consumers do not want to spend a lot of money to buy a device with a pitiful number of available networks. Operators must continue to expand the coverage of 5G networks to make 5G more attractive to consumers." Ken Hailes, director of Strategy Analytics, said in his forecast.

Compared with 5G mobile phones, the monthly shipment of more than 1 million 2G mobile phones is beyond the imagination of many people. The so-called 2G mobile phones mainly refer to mobile phones for the elderly and feature phones, which only have calls and some simple functions such as displaying time and date and sending text messages.

"The demand of the elderly for 2G mobile phones cannot be ignored," said Ma Jihua. It is difficult for the elderly to learn to operate smartphones, but they need to contact their families, so 2G ​​mobile phones are their first choice. In addition, in some remote areas, the coverage of 3G and 4G signals is not as good as 2G, and there is also a demand for 2G mobile phones. According to the data of the Ministry of Industry and Information Technology, by the end of 2018, the total number of mobile phones in the country reached 1.57 billion, of which the total number of 4G users reached 1.17 billion. In other words, there are still 400 million 2G and 3G users in China.

However, just as the US telecom operator AT&T stopped providing services for 2G networks in 2017, sources told the Global Times that the three major domestic operators are also gradually vacating the 2G frequency band. Ma Jihua said that my country's 4G network coverage is already very good, and with the advent of the 5G era, the 2G network will gradually withdraw from the stage of history.