Given that 5G is also being pushed for the internet of things and self-driving cars, we can expect that these devices are going to be hugely expensive.
According to DigiTimes, smartphone supply chain sources said that the cost of Qualcomm's X50 5G modem chips is more than 70 percent higher than that of top-tier smartphone modem chips. Qualcomm and other chipmakers are actively seeking to bring down the costs of 5G chip solutions, but the cost reduction space is quite limited given the fact that 5G chips have to be fabricated using 7nm process or even more advanced 5nm node.
The $1,000 price tag has proven to be a graveyard for smartphones. Apple has largely tried and failed to put its iPhone X into that category, and many just said no it was too expensive. To make matters, worse 5G phones will be heavier and more power-consuming than 4G models.
Much is depending on government policy support and funding capabilities of telecom operators in various countries.
China has readied the frequency bands dedicated to 5G applications and introduced policies to bolster the development of domestic 5G supply chains to support China Mobile and China Unicom that are now the most profitable telecom operators in the world. Accordingly, the suppliers said, the China market will determine who will be the final winners in the 5G era, although the US, South Korea and Japan have claimed to advance the 5G commercialisation to 2018-2019.
Chinese smartphone consumers are highly concerned about price-performance ratios of the devices, and this will pose the biggest challenge to the acceptance of costly 5G smartphones in the China market before the production costs of such models can be significantly lowered.