We’ve hit the peak of 5G revenue, and now the market is on a downhill slide. We’ve been predicting this for years, but now it’s here. Ericsson frightened the market with their guidance last week, and layoffs throughout the industry have been sobering. The picture is likely to be even worse in China. The clouds are black on the horizon.
Every eight years, we have a new “G” in mobile technology and we go through the same cycle. First there is a lot of excitement about new features and performance. The operators spend billions on spectrum and billions more on equipment. Then the market goes through a dry spell, with reduced spending, as the operators try to recoup their investment by milking the cash cow. We start another “G” and the cycle repeats again.
All five analysts at Mobile Experts have lived through at least three of these cycles in the past, so we see the pattern clearly. Our RAN Revenue forecast and our Macro/mMIMO forecast include some depressing charts with shrinking revenue through 2027.
But the topic of this article is not to complain about the reality of the market. Instead, I want to point out the opportunities. Every eight years, the mobile industry hunkers down for another winter, and every time there are new players that emerge in the springtime with innovative ideas and momentum.
- After the 1991 tech recession, Qualcomm launched CDMA and started an epic journey.
- After the 2000 dot-com bust, RIM launched the BlackBerry and quickly dominated the 3G email market.
- After the 2008 “Great Recession,” Google’s Android plan bore fruit, as the free OS grew quickly to capture a huge share of the smartphone market.
- A bonus example is the iPhone introduction in 2007, just before the “Great Recession.” No comment necessary on what happened later.
In all of these cases, the company existed before the crash. In fact, in each case the companies invested and filed critical patents during the crash. In all cases, they led the market out of the slump with something undeniably useful.
So, Mobile Experts has recently released some forecasts of how the market will emerge on the other side of the 2024 tunnel. We’ve added the 6-7 GHz and other “golden band” opportunities to our long-term massive MIMO forecast. And a detailed breakdown of how vRAN will grow slowly for four years, before shooting upward. And a lengthy description of why 5G mm-wave will grow differently in the future.
I’m encouraging our customers to look at the next two years as an opportunity. Your competitors are going to be laying off engineers. Your suppliers might go belly-up. Don’t let it get you down. Instead, focus on customers. Is there a new group of customers out there that need something new? Can you emerge from hibernation with a killer product?
I believe that the answer will be in the enterprise markets. I’m betting my company on it. We’re predicting a steady growth profile for Private LTE and Private 5G network deployment, as well as Edge Computing and applications to support automation in the enterprise. There have been some delays. Software, APIs and the developer community have been immature, making growth slower than some market players want. But our Industrial Private Cellular and Enterprise Private Cellular forecasts illustrate growth in the 17-20% range through the coming recession, and stronger growth afterward.
I recently talked with a company that mentioned their ability to “trivialize” the API interfaces for app developers to be able to easily interact with the network. This is exactly the missing piece that I’ve been looking for, to drive the next major growth cycle. After two years of consolidation and maturity for software platforms, I believe that enterprises will invest heavily in automation with wireless connections.
The next big opportunity is coming for those that can use the slowdown to pivot.
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