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5G will struggle until it's affordable for all
Wireless carriers may not be charging much for 5G service yet, but that doesn’t mean just anyone can adopt the latest in mobile broadband technology. Beyond the question of coverage from the four major carriers is that of device pricing. In order to upgrade to 5G, consumers need to first shell out some big bucks for a compatible phone. In other words, 5G will remain a luxury for the well-off until prices come down.
Just how much does 5G cost right now? Here’s a breakdown.
AT&T, T-Mobile, and Verizon Wireless all sell the Galaxy Note 10 Plus 5G at the $1,299 price point. This is AT&T’s only fifth-gen phone for consumers at the moment.
T-Mobile also offers the OnePlus 7T Pro 5G McClaren for $899, while Verizon also offers the LG V50 ThinQ 5G for $999, the Galaxy S10 Plus 5G for $1,299, and the Motorola Moto Z4 with 5G Moto Mod for a combined $848.
These full retail prices aren’t exactly what U.S. consumers will pay. Monthly costs range from $15 to almost $50, depending on the phone and carrier. Either way, the average 5G smartphone price in the U.S. is about $1,000.
Plan pricing itself varies some and could be much clearer. With AT&T, for example, you can use the Elite or Elite Plus plans, which provide access to 5G, for $75 and $85, respectively. These plans also exist for 4G-only customers. Sprint requires you to subscribe to its top-tier Unlimited Premium Plan for $80 per month, T-Mobile’s Magenta Plus plan costs $85, and Verizon’s Do More Unlimited plan costs $80. These monthly prices are per line and will fluctuate a bit if you add more lines or make other adjustments.
The average 5G plan price is $80 per month before taxes, fees, and device payments. These are not cheap options.
Most consumers aren’t spending $1,000 on phones
Very few Americans drop big money on smartphones. In fact, fewer than 10% spend more than $1,000 on a device, according to NPD Reports. The research firm claims people living in Los Angeles and New York City are most likely to fork over some coin for a top-tier iPhone or Android, though the reasons aren’t entirely clear. Moreover, the buying public has slowed the upgrade cycle significantly.
“Consumers are holding onto their smartphones for longer periods, which has presented a challenge for the smartphone market,” said NPD’s Brad Akyuz. “Manufacturers and carriers are expecting 5G to help reinvigorate the upgrade cycle, but pricing could present another hurdle.” Pricing. You don’t say.
How will this all change? When will we get to affordable 5G?
The 5G chips are down
Affordable 5G will start with affordable chips. Both Qualcomm and MediaTek have unveiled systems-on-a-chip that include upper mid-range processing capabilities with lower-cost 5G modems. From Qualcomm that means the Snapdragon 765, and from MediaTek that means the Dimensity 800. These are the chips that will wind up in phones that cost between $500 and $700 — still not “cheap” per se, but much more affordable than the current $1,000 average.
Phone makers are down with it. HMD Global, for example, plans to debut a 5G handset that it expects will cost half that of today’s 5G crop. Motorola has made similar rumblings. It would be great to see commitments to affordable 5G from Samsung, LG, OnePlus, and others.
The carriers, too, will need to do their part. While it goes without saying that AT&T, et al., will want to recoup the many billions of dollars they’ve spent making 5G a reality, the truth of the matter is that the carriers will have to make do with a volume play rather than a pricing play.
Until we have $500 phones and $45 plans, 5G will remain out of reach for many. Basically, the carriers have built the Autobahn, but are only allowing Porsches to drive on it. We need to get some V