Mon. May 16th, 2022

How 5G Can Address Shifting Market Dynamics

5G Innovations

Today about a third of Americans are working from home, with many also home-schooling their children using online tools. Nearly everyone who has been on a recent video call has had the experience of a frozen video stream or interrupted internet connection.

In a time of pandemic, the growing work-from-home movement is creating the need for more broadband capacity in more places, and reports indicate that trend is likely to continue.

Estimates suggest that 25-30% of the workforce will work from home multiple days a week by the end of 2021. Up to half of Facebook employees could work remotely within five to 10 years. Google has said its employees will do so at least through July of 2021Square and Twitter plan to allow their associates to work remotely on a permanent basis.

In this expanded work-from-home environment, it becomes more important than ever to improve the scalability, speed, security, and reliability of network infrastructure. The pandemic laid bare weaknesses in the telecommunications infrastructure of entire nations, boosting demand for the increased level of quality and availability afforded by 5G connectivity.

Reports suggest the pandemic may fast-forward adoption in the U.S. of 5G, which promises download speeds 100 times faster than 4G. Daily data usage across broadband networks continues to reach new records, prompting telecom providers to fast-track 5G access and related services to their customers.

Yet 5G was only available in about 1% of phones sold in 2019. Tech analyst Rob Enderle recently said that “the hardware shortage [related to 5G] is undoubtedly harming timelines.”

Unforeseen demand for 5G is having a bullwhip effect across multiple tiers in the global electronics supply chain. The net effect of 5G’s accelerating adoption during the pandemic is to shrink the supply chain, forcing manufacturers of electronics components, semiconductors and network equipment to align lead times and share risks at multiple tiers.

recent analysis by Bain & Company provides insights into how accelerating adoption of 5G will change market dynamics. Demand for new services that promise to deliver better customer experiences, less network latency, improved security, and greater national infrastructure resiliency are transforming the future of 5G supply chains.

5G pricing is already inelastic, making value-added services from every member of the supply chain the primary source of revenue today. The coming 5G supply-chain shakeout will hit those that rely only on transactions first, with distributors, suppliers and device manufacturers focusing on value-added insight realizing the best opportunities for growth.

One of the biggest roadblocks to 5G’s progress is engineers’ inability to secure the components, processors and chipsets they need for early design prototypes. Specialized vertical search engines such as FindChips can accelerate discovery and selection of key components.

Meanwhile, forecasts of increasing demand for 5G are forcing supplier relationships across multiple network tiers to rethink risk and revenue assumptions.

5G electronics providers need to achieve multi-tier ecosystem visibility to improve the probability of success for new-product introductions. 5G components suppliers are rapidly progressing from relying on supplier portals and automated settlement to integrated go-to-market systems with full visibility of shipments and inventory.

This trend points to the need to streamline 5G design-to-source intelligence. That becomes possible when semiconductor and electronics component suppliers and distributors have visibility into multiple digital touchpoints, such as online resources utilized by engineers and other product designers. In the process, suppliers and distributors can see the demand signals that information represents. And they gain the ability to understand the intent those signals represent about the timing and requirements of new-product introduction efforts related to the broader 5G market rollout.

Sales and technical procedures for influencing design cycles in the electronics industry were already under pressure to transform before COVID-19 hit. The pandemic amplified the need for change, in favor of an approach that’s more intelligence-driven. Suppliers must improve the insights into global markets that are necessary to influencing and capturing new customer design cycles. The ability to engage with buyers in new ways is key to meeting revenue and growth objectives across the 5G lifecycle.