Before the new technology becomes a reality for consumers, two transitions need to take place.
1) Mobile operators have to upgrade their networks with 5G gear made by the likes of Huawei and ZTE of China, Sweden’s Ericsson and Finland’s Nokia. And;
2) Phone makers need to make handsets with built-in 5G radios ready to hook up to networks.
Qualcomm is the dominant player in smartphone communications chips, making half of all core baseband radio chips in smartphones. It is one of the last big U.S. technology companies with a major role in mobile communications hardware.
Most other baseband chips come from Asia: MediaTek of Taiwan holds about one quarter of the market, while Samsung Electronics and Huawei -— two big smartphone makers - develop chips for their own devices. Huawei does through a subsidiary known as HiSilicon.
Its dominant position in 5G comes from its mastery of two areas:
1) Getting its patents adopted in what are known as standards and then
2) Selling the chip designs that work with those standards.
The standards are set by a global body to ensure all phones work across different mobile networks, and whoever’s essential patents end up making it into the standard stands to reap huge royalty licensing revenue streams.
Qualcomm has landed a number of these foundational patents, which means that both handset makers and telecommunications gear makers will have to pay it licensing fees. It dominated standards setting in 3G and 4G wireless and looks set to top the list of patent holders heading into the 5G cycle.
All that concerns me ...
Will this be a spectrum hog?
What’s the opinion on that?
Wiki: “5G will use spectrum in the existing LTE frequency range (600 MHz to 6 GHz) and also in millimeter wave(mmWave) bands (24–86 GHz). “
Sounds like a lot.
So, which company’s stock should we buy?
QCOM is at 57 from a high of 75 and paying a nice 4.4% dividend.
Huawei is not public.
Any others?
All 5G Chinese made networks will, in some fashion or another, report back to the Chinese PLA, which owns/controls all Chinese companies.