If you’ve had on the TV within the last year, you’ve likely been inundated by cellular provider commercials about 5G. So, what’s all this buzz about and does it matter beyond your cell service? The short answer is absolutely. 5G, the next generation of wireless technology, represents a massive leap forward for wireless mobile communications. These communications won’t simply exist between just cell phone to cell phone; 5G will allow for a web of communications between a number of different devices. Vehicles. Robots. Computers. Smart home monitors. Essentially, 5G will allow for the total functionality of the Internet of Things (Iot): another buzz word that consumers have been hearing over the past few years.
As an investor, 5G stands to transform the power of data as we know it, touching and disrupting many industries as we know them today. We believe that this new wave of wireless will establish a critical mass of coverage that can bring these ‘futuristic’ use cases into our lives today.
For investors who pay attention, this technology could create an incredible growth opportunity as it paves a new frontier of connectivity in 2021 and beyond. These are the industries and areas that we believe to have the highest potential for 5G adoption this year:
- Immersive Experience
- Connectivity in Healthcare
- Reimagining Transportation
- 5G Cloud Gaming
- The Future of Smart Manufacturing
- Investing in 5G
Bandwidth required for VR/AR is high and critical for a true immersive experience. According to ABI Research and Qualcomm, current generation bandwidth is 10-200Mbps for streaming to next-generation video viewing. In order for the AR/VR experience, we need 200-5000 Mbps bandwidth. Movie viewing experience will be transformed with VR technology that can deliver vibrations and so we can feel and experience films.
Meanwhile, the ultra-fast speeds of 5G could deliver more immersive experience for sports fans. NFL has already installed 5G in over dozens of their stadiums. NFL teams are already using real-time remote coaching through virtual reality experience. Tis blurring the barriers between the real and the virtual can only be achieved through 5G technologies. Companies like Qualcomm, AMD, Nvidia and are enabling the infrastructure builds for 5G while companies like National Instruments are critical for testing the equipment that is necessary for the network build.
Connectivity in Healthcare
COVID pandemic has magnified the importance of having medical care in times of emergency in the privacy of our home. AR/VR, wearable devices, virtual care are all the applications that may hold the key to improving the interaction between patients and healthcare professionals. 5G’s speed and low latency can make this possible. Looking out, we are seeing enormous opportunity in wearable devices for example that can track patient monitoring as physicians will be able to get clinical grade medical data as quickly as possible for quicker diagnosis. Late last year, Philips announced that it will acquire one of our index members BioTelemetry validating the need for more in-home care management technology. Innovative solutions such as BioTelemetry’s remote cardiac monitoring products and the advent of precision medicine using genomic analysis, demands high compute power and 5G network.
Self-driving cars need a modern wireless infrastructure powered by 5G that connects drivers with computers with ultra-low latency. The mobile connectivity that only 5G can provide is a necessity for autonomous systems to be fully autonomous from semi-autonomous today. In order for cars to be aware of their surroundings and improve the safety concerns, various sophisticated sensors, LiDars and radars have to communicate with each other with near zero latency. Carriers are investing billions into 5G networks while autonomous driving car manufacturers are also accelerating its launch at a record pace.
Today, 5G will still be a key enabler of advanced drive assist technologies and will allow us to do Level 3- Level 4 driving with more confidence. This is why companies like Waymo One (subsidiary of Google) and Zoox (self-driving startup owned by Amazon) recently launched its driverless-ride hailing service to the public.
5G Cloud Gaming
There is an expectation that 5G will cause an explosion of cloud-based video game streaming, in which games will be accessed through a centralized server rather than downloads. 5G’s faster network would accelerate the gaming industry to reach the mainstream gamers. Google and Microsoft are hoping to create more cloud storage services for game streaming.
Amazon paid $1 billion for Twitch, which accounts for almost ½ of all live video streaming traffic. Index members like Electronic Arts, Google, and Nvidia have aggressively invested over a decade to pursue their own vision in leading the cloud game streaming services. Most of the recent laptop PCs released this year will be 5G-equipped to support 5G game streaming.
The Future of Smart Manufacturing
Vast improvements in supply chain logistics will see efficiencies and advanced analytics due to the capabilities that are now possible with 5G networking. The core enabling technology requirements for smart manufacturing is reliable, high speed and strong coverage for seamless connectivity. Smart factories will benefit from these key advancements in 5G as digital twins, artificial intelligence capabilities are possible for monitoring and improving the assembly line processes.
Companies like Boeing are using 5G technology to improve jet engine manufacturing processes where high-speed data collection is used for real-time monitoring in various operational conditions. With the rising demand for automation and transparency across the manufacturing floor with multiple devices that are connected, next generation wireless solutions are required to satisfy the needs of the factories of the future.
Investing in 5G
Interested in tapping these 5G growth themes as an investor? We believe that the best way to capture disruptive technologies like 5G is through ETF investing. Investing in a broad portfolio of both the major players and the lesser known, smaller-cap companies on the forefront of innovation allow for exposure to the entire tech universe.
The ROBO Global Artificial Intelligence ETF (NYSE: THNQ) and the ROBO Global Robotics & Automation ETF (NYSE: ROBO) invests in companies around the world that are leading the AI revolution – including many that are tied to 5G and wireless technology. Included in THNQ are companies developing the technology and infrastructure enabling AI, such as computing, data and cloud-services, as well as companies that apply AI in various verticals, from business processes to e-commerce and healthcare, among others. THNQ provides exposure to new market opportunities and potential revenue growth created by the expansive development and application of artificial intelligence.