Is there still a market for pure 4G mobile phones?

According to a report by China Business News, Huawei is actively ordering 4G smartphones and related terminal parts from suppliers, and some component manufacturers have received notifications that they will resume purchasing motherboards and other parts this month.

[[354177]]

Huawei did not respond to the above news.

We will not comment on the authenticity of the news. What we want to discuss is whether there is a market for pure 4G products at the current stage. We need to look at this question from two aspects: network infrastructure and market segment demand.

4G networks will exist for a long time

With the development of 5G services, in order to maximize resource utilization, mainstream operators around the world are planning to achieve minimalist networks by simplifying standards, saving energy and reducing costs, and reducing complexity, thereby reducing network costs.

From the perspective of simplifying the standards, the withdrawal of 2G and 3G networks is an inevitable choice, and 4G/5G will coexist and develop in coordination for a long time; of course, the ultimate goal of operators is to achieve only one 5G network, but considering various reasons, this process is very long.

How long will it take? In the past, the industry generally believed that it would take at least 10 years. The reason behind this is that 4G is still a full-service basic network, a high-quality network with extensive coverage, and its value is also very obvious. At least it is reflected in several aspects: carrying voice services, the popularization of VoNR seems to be out of reach now, and VoLTE is still the mainstream choice in the market; carrying IoT services, it is an industry consensus to take over 2G IoT services through NB-IoT and 4G Cat1/1bis technology!

The long-term existence of the network lays the foundation for terminals and applications, and there will be no embarrassing situation of GSM terminals having no network available.

The market segment needs to be real

In the current industrial environment, the demand for pure 4G products is obvious, and we can look at it from two dimensions.

In terms of products, as mentioned above, 4G still has a large market in feature phones, IoT products, tablets, mid- and low-end mobile phones, etc. Take 4G feature phones as an example. Its biggest selling point is VoLTE, and its business model is to deliver it to consumers through operator centralized procurement and subsidies, with the aim of accelerating the withdrawal of GSM from the network. The same is true for IoT products. NB-IoT is the mainstream standard of 5G mMTC, with a long life cycle and a wide range of application scenarios.

From a regional perspective, although 5G mobile phones have accounted for more than 60% of the total shipments in the domestic market (64.1% in October); from a global market perspective, Eastern Europe, Russia, Asia-Pacific, the Middle East, Africa and Latin America are still 4G markets. Some regions only provide 4G networks, and 4G products are still competitive.

For Huawei, which has been suppressed without reason, it is completely understandable to restart the production of 4G terminal products at this time. Although Huawei will not launch ultra-low-end products, related products can solve the demand for mobile phones and tablets in most overseas regions, stabilize the channels, retain the team and the spark, and wait for the opportunity to turn around in the future. There is hope as long as you are alive!