Mobile

How 5G Could Be Rocket Fuel To Retail

5G

The race to 5G retail is on.

The new, faster mobile network technology is a big part of the plans for many commerce and payments operators, even though specific use cases have been only slowly emerging as the technology and the devices to support it are deployed.

Recent news out of Asia serves as solid foreshadowing of how 5G could enhance retail in the coming few years. It’s a game Apple could be closer to joining now that it has reached a settlement with smartphone chip maker Qualcomm.

5G Retail Plans

South Korea’s SK Telecom and retail conglomerate Shinsegae Group have joined forces on 5G retail, for instance. They plan develop new business models and services centered around 5G technology. The recent deal calls for the companies to develop what a report called “5G-based business models that can be applied to Shinsegae’s department stores and discount store chain E-Mart as well as various shopping malls.”

That effort will apparently involve virtual reality (VR) along with augmented reality (AR). The plan is to use VR technology to enable consumers to shop via digital platforms instead of inside brick-and-mortar locations, though no further details were immediately available.

That’s not to count out the U.S. when it comes to the potential and reality of 5G technology for commerce. The wireless industry association CTIA released a report that said the U.S., in terms of readiness, deployments and spectrum allocation, is leading the transition to the new telecommunications standard. However, it does struggle in two areas: mid-band spectrum and national strategy. Even so by the latter part of 2019, the U.S. should have 92 commercial 5G deployments, versus south Korea’s 48, 16 in the U.K. and none in China.

Further evidence of the promise of 5G — along with the quick manner in which 5G deployments will happen — came earlier this year from the Mobile World Congress in Spain. According to a report from that conference, “the consensus message seems to be that with the worlds of artificial intelligence, machine learning and cloud computing aligning, the momentum behind 5G is almost irresistible.” For example, Mickey (Hiroshi) Mikitani, CEO of Japan-based Rakuten, told conference attendees, “We are building the first end-to-end, fully virtualized, cloud-based 5G network. New services can be deployed in a very nimble manner. We don’t have specialized hardware. Everything is software and virtualized and put in the cloud.”

Various estimates have expressed the commerce- and payments-related stakes involved in 5G deployment, and a recent analysis from Adobe Digital Insights stands as a relatively reasonable prediction at this point: Over the next three years or so, 5G deployment will result in an additional $12 billion in mobile commerce revenue for U.S. retailers. That, of course, “assumes a smooth, scheduled rollout of 5G networks. Nonetheless, it’s a clear statement that when friction is removed from the user experience, people respond.”

Apple intends to take part in the 5G race, but the timing of Apple’s entry remains unknown, even after the Qualcomm settlement. Before the settlement, Apple was at risk of not having a 5G-enabled phone until 2020. Even after it, some observers still expect that timetable to hold, at least roughly.

Apple, for its part, was pretty much mum on its specific 5G plans following the settlement. “As we lead the world to 5G, we envision this next big change in cellular technology spurring a new era of intelligent, connected devices and enabling new opportunities in connected cars, remote delivery of health care services, and the IoT — including smart cities, smart homes, and wearables,” Apple said in a statement. The company said nothing more on the issue of 5G.

What’s Next?

But, of course, informed speculation about Apple’s next 5G moves was rampant in the wake of the settlement. “Currently, the majority of 5G smartphones that have been announced, including the Samsung Galaxy S10 5G, use modems from Qualcomm, and it seems like Apple will have few options other than to join them if it wants to release a 5G iPhone anytime soon,” reads one analysis of the settlement and what comes next. That said, “with just five months to go until Apple is due to release this year’s iPhones, it’s unlikely that it will have such a 5G modem integrated in that time.”

That said, Apple is unlikely to wait too long. “Apple is rarely the first to embrace new technologies, but 2021 would be late to release a first 5G phone, even by its standards,” that report said.

Apple also has had talks with MediaTeck and Samsung about providing 5G modems — indicating that Apple doesn’t want to rely solely on Qualcomm. And Huawei reportedly said it is willing to provide Apple with chips for 5G. Not only that, but Apple could develop its own chips, according to analysts, or even buy Intel’s 5G modem business. That said, it would reportedly take Apple up to three years to develop its own 5G modems.

The worlds of digital payments and commerce are starting to slowly feel the early impacts of 5G technology, and that’s happening with or without Apple.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. In the December 2019 Mobile Card App Adoption Study, PYMNTS surveyed 2,000 U.S. consumers for a reveal of the four most compelling features apps must have to engage users and drive greater adoption.

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