When's the last time you really, deeply lamented the fact that your phone's mobile data connection wasn't marginally—maybe 10 or 20%—faster? Never? Because right now, and for the foreseeable future, that's statistically all 5G is going to get you. In return, manufacturers of 5G phones are asking for a hell of a lot from you, the consumer. Specifically, the dubious real-world benefits of 5G come attached to phones that are becoming legitimately, ludicrously expensive.
OnePlus wants a minimum of $700 for its cheapest 5G phone, and Verizon wants another $100 on top of that for its version with (currently literally pointless) mmWave 5G. The Galaxy S20 series starts at $1000, and goes up to a jaw-dropping $1400 for the Galaxy S20 Ultra, a phone so expensive we legitimately can't recommend it to almost anyone. And for what? What is it we are really paying for here? Let's call a horse a horse: we're paying a 5G tax, and it's one that ordinary consumers truly do not need to be subjected to in 2020.
We're paying a 5G tax, and it's one that ordinary consumers truly do not need to be subjected to in 2020.
When 4G launched way back in 2011, yes: some of the earliest phones were rather expensive for the time. The HTC ThunderBolt was $750 full price (this information was shockingly hard to find, by the way), which was a full $100 more expensive than the iPhone 4S it was contemporaneous to. At the time, the ThunderBolt was well-known for being a pricey handset, and garnered attention specifically for it. In fact, one analyst firm suggested that the cost of the phone's 4G components added nearly $40 to the bill of materials, accounting for a sizable chunk of the $262 total cost estimate. But when the LTE-enabled iPhone 5 launched a year later, it did not cost $750. It cost the same $650 as its predecessor. The Galaxy S III, which launched the same year as the iPhone 5, cost $600 for the Verizon LTE-enabled flavor.
Those 4G phones were expensive for the time, yes, but there was absolutely not some categorical change to the smartphone pricing paradigm because of 4G. In the intervening period, if anything, raw component costs drove up the cost of phones over the last 8 years: bigger displays (and using more expensive panel tech), more and better cameras, bigger batteries, more sensors, more microphones, larger speakers, waterproofing, wireless charging, NFC, more powerful vibration motors, more storage, more RAM, and more silicon overall make the premium smartphones of today more complex and costly. As a result, we have seen prices steadily creep up, and I do think a lot of that creep is relatively defensible: if we didn't want big phones with big batteries with lots of cameras, we probably wouldn't be buying them by the truckload.
With 5G, we've seen a complete upending of the smartphone pricing spectrum. I'll give the most relevant examples here.
- Galaxy S10: $800 -> Galaxy S20: $1000 ($200 increase)
- Galaxy S10+: $900 -> Galaxy S20+: $1200 ($300 increase)
- OnePlus 7T: $600 -> OnePlus 8: $700 ($100 increase)
- OnePlus 7 Pro: $670 -> OnePlus 8 Pro: $900 ($230 increase)
These aren't little adjustments, they're huge jumps. In fairness, we should have seen it coming: Samsung basically warned us all with the $1300 Galaxy S10 5G last year. And yes, Apple sure helped by breaking the thousand dollar sound barrier with the iPhone X back in 2017, but that's Apple, they sort of get to do what they want.
My larger point here, though, is not about Apple or Samsung or OnePlus in particular, it's about an entire ecosystem: carriers like Verizon, network vendors like Ericsson, chipset makers like—no, actually, literally just Qualcomm—and phone OEMs like Samsung have all conspired to Make 5G Happen, and we as consumers get the wonderful responsibility of paying the bill. I think consumers may just catch on that that's what's happening, though.
For one, there remains no killer use case for 5G, where you can even get it. For all the pained marketing language that evolved around 4G, it enabled two absolutely transformative experiences for most users: mobile music and video streaming. 4G, in many ways, completed the transformation of our phones into the hubs of our digital lives, and enabled using those phones in new ways that simply weren't practical before for a huge swath of the population. 5G, on the other hand, enables... well, let me direct you to one of 5G's leaders, Ericsson. I implore you, dear reader, to find a single compelling consumer application on this page that is not some heavily copy edited nonsense like "mobile broadband everywhere" or "connecting humans to IoT."
By forcing its 5G modem into its top-tier Snapdragon 865 chip, Qualcomm dared every phone manufacturer to blink: pay our 5G premium, or get ready to debut a smartphone without our premier product.
Even the experts have a difficult time articulating just what 5G is really, actually for aside from making room for more traffic on the internet. And when that's what 5G's big promise boils down to, it's pretty insulting to say to consumers, "well, your phone is $200 more expensive now because we need to make room on The Internet for Stuff, someday." The most frustrating part of this entire situation is how justified the players in this space feel in foisting 5G into everything they can, and I truly believe the buck stops with Qualcomm on this front. By forcing its 5G modem into its top-tier Snapdragon 865 chip, Qualcomm dared every phone manufacturer to blink: pay our 5G premium, or get ready to debut a smartphone without our premier product. The gambit worked, and almost every high-end phone announced in 2020 has 5G, because almost every high-end phone announced in 2020 has a Snapdragon 865. There you have it, 5G in your phone, whether you want it or not.
Let me pose this question to you, Qualcomm (and frankly, every phone manufacturer): do you think that, presented with two identical phones, but one with 4G that costs $900, and one with 5G that costs $1000, that most consumers would choose the 5G version at this point? Of course they wouldn't. It's not even an argument worth having, it is actually dumb to suggest otherwise. And this is the entire problem with forcing 5G onto consumers before 5G has any meaningful reason to exist in consumer products. The amount of credibility Qualcomm and its OEM partners have lost with tech journalists and enthusiasts alike here is not insubstantial.
I am not a 5G naysayer. 5G will have its time and its place, and I do believe its rise is inevitable. It will do good things, like make our networks less congested and (hopefully) increase data speeds. But the attempt by Qualcomm and phonemakers alike to use 5G as a shield for large price increases is utterly transparent. When we speak to phone manufacturers off the record, Qualcomm gets the blame for raising chip prices. When we speak to Qualcomm, we get cited examples of phones in China that use its new chip and cost under $600 (implying other OEMs are simply greedy). If I know one thing, it's that when it comes to corporate finger-pointing, follow the money. Qualcomm saw a chance to raise chip prices by tying in 5G as a requirement, and phone manufacturers saw a rationale for dramatically hiking MSRPs. They're all to blame for 5G price gouging, and I hope consumers do blame them: with their wallets.