The one big problem with upgrading to 5G
If it doesn't have 5G, forget it.
That's the message expected from millions of Australian smartphone buyers this year as they eye off a future of faster downloads, better connections, and fewer delays, and dismiss new gadgets that can't keep up.
Analysts say the trend is likely to see smartphone sales take a massive dive in Australia in 2019 as fewer savvy shoppers upgrade their handsets while companies such as Apple fail to meet their new demands.
The revelations come as Optus prepares to enter the 5G market for the first time, and after Samsung revealed plans to launch another high-end 5G device within days.
But analysts warn that consumers must be prepared to pay higher prices for higher download speeds, and may not get the greatest benefit from the technology until coverage expands.
5G mobile technology captured headlines again ahead of Samsung's launch of a new 5G smartphone this Friday.
Samsung Electronics Australia mobile vice-president Garry McGregor said it was vital to launch a 5G version of the company's Galaxy Note 10 even though the technology was "still in its infancy".
"In our research, 64 per cent of customers who are going to purchase a new phone want to future-proof themselves by buying 5G," Mr McGregor said.
The fifth generation mobile technology promises to deliver download speeds up to 20 times faster than the 4G network it replaces.
According to Lifewire, this could mean it takes just 35 seconds to download a movie to your phone rather than 27 minutes.
5G will also deliver lower latency and greater capacity, meaning mobile phone networks suffer less congestion, fewer slowdowns, and will be capable of connecting more devices to the internet.
And research shows Australians are keen to experience the benefits of the new technology.
A Kantar study of Australian smartphone users found 7.7 million were aware of 5G technology, and four million planned to invest in it.
But more concerning for phone makers is the impact that interest could have on phone sales.
Smartphone sales are expected drop by eight per cent in Australia this year, to 8.7 million, according to Gartner, as potential buyers wait for their favourite smartphone to arrive with 5G capabilities.
Phone sales are expected to mostly rebound next year when 5G technology becomes more common.
Telsyte managing director Foad Fadaghi said part of the new trend was genuine enthusiasm for a new technology, but it was also about "future-proofing" an increasingly expensive investment.
"It's a hygiene factor when you're spending over $1000 and you're considering how long you might own that phone," Mr Fadaghi said.
"You don't want to buy a handset that will be outdated imminently. For this reason, it's going to be hard to sell a 4G handset right now."
That could be troubling news for phone makers yet to invest in 5G technology, including Google and Huawei.
Mr Fadaghi said the focus on 5G could also prove "a big problem for Apple this year" after the company was widely tipped to delay the launch of a 5G iPhone until next year.
"There will be some big challenges for Apple over the next 12 months if they're not bringing out a device with the same level of future-proofing as their Android competitors," he said.
"Even earlier this year, Samsung offered a 5G upgrade because it recognised the market was demanding 5G."
Samsung will launch its second 5G smartphone in Australia this Friday in the top Galaxy Note 10 handset.
The 5G Note will come at an extra cost - at $1999 it demands $300 more than its 4G counterpart - but it will also come with double the storage in recognition that users with faster internet speeds will download more content.
Creative Strategies technology analyst Carolina Milanesi said it was a smart move from Samsung, as smartphone buyers in that price range would be "thinking about how their investment should last at least a couple of years".
She predicted the biggest smartphone spenders would be most likely to delay purchases while waiting for 5G, but the trend would spread to more savvy shoppers next year.
"When you're getting to the second half of 2020, and into 2021, 5G will play a part," she warned.
Samsung's new highly connected handset will join the three other 5G handsets currently for sale in Australia - the Samsung Galaxy S10 5G, the Oppo Reno 5G, and the LG V50 ThinQ - as well as HTC's 5G hotspot device for connecting multiple gadgets to the high-speed network.
Only Telstra has delivered 5G connectivity in Australia so far, but that will change with the arrival of Samsung's Note 10, as Optus revealed it would also activate its 5G network.
A spokeswoman said the company boasted 100 live 5G sites and was committed to "rolling out its 5G network" for phones and mobile broadband services.
Mr McGregor said Optus' entry into the market was important not just for its customers but to ensure all tech companies were racing to deliver on 5G promises.
"There'll be a level of competition in market which is always good for consumers," he said.
"In Australia, consumers have always benefited from healthy competition and I think 5G will be one of those battlegrounds again."