Although the penetration of 5G technology is still in its infancy stages, consumers are willing to spend more to utilize the network’s unlimited benefits. In the U.S., spending on 5G smartphones is projected to beat other established consumer tech products.
According to data acquired by Finbold, Americans are projected to spend a whopping $61 billion on 5G smartphones in 2021, highlighting the significance of the technology that is still relatively new. The amount accounts for 12.5% of the $487 billion Americans plan to utilize on consumer tech in 2021.
Elsewhere, Americans are also estimated to spend $45 billion on laptops in 2021 to rank second, while television will receive the third-highest amount at $24 billion. Among consumer tech products, e-toys are projected to receive the least amount at $3.6 billion. The data on American consumer tech spending is provided by the Consumer Technology Association.
Why Americans are spending more on 5G smartphones
The estimated spending on 5G smartphones highlights the consumers’ attitude towards the technology that is increasingly gaining traction globally.
The U.S. is one of the mature smartphone markets ranking as a critical player in the 5G technology penetration. Spending on 5G smartphones is significant, with most users intending to upgrade their experience to the technology that introduces a faster, improved wireless network. The technology also guarantees a reduction in lag time and a greater density for smart devices.
The spending also shows the culmination of efforts by phone companies to upgrade their wireless networks to 5G. With the upgrades, players in the sector have increased awareness campaigns on the technology with large-scale advertising campaigns. For the players involved, the amount set to be spent on 5G smartphones should be a positive outlook as it offers a chance to recoup costs invested in developing and popularising the network.
Additionally, as a top smartphone market, most U.S. consumers have access to manufacturers with 5G-ready devices. Our previous research showed that as of Q4 2020, U.S.-based Apple accounted for a share of 19.5% of 5G ready smartphones, with Huawei topping at 26.9%, followed by Samsung at 25.1%.
Apple accounted for the share despite having a single 5G-ready phone at the time. The company is expected to increase its line of 5G devices giving domestic consumers varied options. Notably, the integration of 5G technology by firms like Apple and Samsung is expected to spur growth in their stocks.
Interestingly, despite Americans projected to spend a significant amount on 5G smartphones, previous research shows that residents are the most skeptical about the technology. A Prolifics Testing study indicates that 374,700 Americans conducted a skeptical online search regarding 5G each month.
The spending estimates might also indicate that consumers are putting away some of the skepticism around the 5G network. Notably, at the technology’s onset, the smartphone user base exhibited price concerns and the utility of the devices.
However, the government’s implementation of conducive policies and a growing basket of 5G use cases might have turned the skepticism. At the same time, there were initial fears that the technology is responsible for the coronavirus pandemic. However, the fears have since been debunked.
60% of the global population expected to have 5G coverage
Furthermore, the 5G technology is projected to spread globally as more regions set up the relevant infrastructure. The growth of smartphones is also highlighted by our previous research that indicated that about 4.74 billion people, or 60% of the global population, will have access to 5G coverage by 2026. The United States, alongside Asia and Europe, are expected to account for the highest share of the 5G technology penetration.
In general, the total spending on consumer technology products by Americans is partly a result of the coronavirus pandemic. The health crisis accelerated the shift towards technological devices. Most of the devices have aided remote working, learning, entertainment, and communication as more people spent more time in lockdowns.
It is vital to mention that despite spending being highly influenced by the pandemic, the crisis also negatively impacted the sector resulting in a global chip shortage.
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