Chip Makers, IoT to Gain From New 5G

The next big broadband technology, the deployment of 5G by the end of 2020, should provide quick and efficient connectivity for Internet of Things (IoT) devices. The booming IoT space, along with its supporting chip makers—positioned to piggyback on the industry’s growth—will see market capabilities expanded with new 5G technology.

If 5G lives up to its hype, it could provider unprecedented broadband connectivity to homes, businesses and billions of devices constantly transmitting data back and forth. The faster, more-efficient 5G connection should support longer battery life for low-power hardware with 5G modems, while maintaining the ability to handle mobile use cases serviced by 3G and 4G networks, reports The Street.

New 5G technology will reduce the power required to receive and transmit data, compared to 4G, while increasing network capacity. The 5G Infrastructure Public Private Partnership (5GPPP) has announced plans to provide “1000 times higher wireless area capacity” comparable to 2010, while aiming for a 90% drop in power consumption and 80% decrease in latency, or the minimum time required for a packet of data to move across a network.

The Next Industrial Revolution

The IoT, projected to grow to $1.7 trillion by 2020, is already developing as an integral part of 2016’s digital reality. Tech giants Cisco Systems Inc. (CSCO) and IBM Corp. (IBM) are both heavily investing in expanding IoT technologies,while niche platforms such as Skyworks Solutions Inc. (SWKS) and InvenSense Inc. (INVN) are positioned to rake in revenues from manufacturing the actual hardware used in the IoT. (See also: Internet of Things Deal May Lift Skyworks.)

Tech industries across the board are preparing for an IoT breakthrough, specifically telecommunications companies anticipating the boosted capabilities to be provided by 5G technology. AT&T Inc. (T) is now selling IoT data plans and teaming up with Intel Corp. (INTC) to launch an IoT platform, while Verizon Communications Inc. (VZ) has teamed up with Qualcomm Inc. (QCOM) and gone the acquisition route with the integration of IoT startup Sensity Systems.

As 5G mobile deployments start picking up, chip and service providers should benefit greatly, particularly Qualcomm and Intel, which have already invested heavily in 5G technologies. Apple Inc. (AAPL) emphasizes its 5G leadership position, “because our technological strength to deliver end-to-end 5G systems, from modems to base stations to all the various forms of connectivity that exist today and will exist tomorrow.” (See also: 3 Plays for the Booming IoT Space.)