The increasing price tags on smartphones is often blamed for the stagnation in sales of the devices. Unfortunately, the next big thing in smartphones—super-fast 5G wireless networks—isn’t likely to make the devices any cheaper.
Optimism abounds in the wireless industry that 5G will spark sales growth by giving smartphone users internet speeds comparable to what they experience on wired broadband connections. But the first wave of 5G phones will also contain expensive new parts, which could add up to 20% in costs to each device, by some estimates. That could lead to significantly higher prices for early 5G phones, which should temper hopes for a quick revival in an industry that has seen flat or declining smartphone sales for several years. The more immediate beneficiaries of 5G will likely be makers of wireless components.