First 5G smartphones may have massive price premium

Android smartphone brands are already preparing to launch their first 5G handsets, but new technical requirements means they won’t be cheap to build.

The bill of material costs for the first flagship 5G Smartphones could be between 20% and 30% higher than for the 4G equivalent. This suggests that suppliers and mobile network operators will be able to command a substantial price premium from early adopters.

The increased costs of 5G devices stem from two major improvements that must be made. First, application processors must be paired with 5G modems, and second, additional peripheral components such as Wi-Fi and power amplifier modules will be needed to enhance reception and signal filter performance. As a result, the first 5G smartphones are likely to be larger and thicker.

As-yet unresolved issues with the design of 5G devices will also bump up costs. Manufacturers are currently finding thermal dissipation a big challenge because the new antenna components needed for 5G will generate more heat and consume more power.