Forbes Column

April 9, 2020
Samsung Breaks $500 Barrier for 5G Smartphones with New A Series

By Bob O'Donnell

One of the biggest challenges that the telecom industry is facing in moving to 5G is the availability of 5G-capable phones at mainstream prices. Despite the many efforts to make the transition from 4G to 5G as smooth as possible—including things like Non-Standalone (NSA) networks, Dynamic Spectrum Sharing (DSS) and, of course, phones that automatically fall back to strong 4G LTE connections if 5G service isn’t available—big network generation transitions are always a bit of a chicken and egg conundrum.

The simple truth is that telco carriers have to balance their investments in building out the networks needed for faster 5G coverage in more places with the reality of how many people are able to use (and pay for) the service. In other words, there needs to be enough 5G devices in use to justify their network buildouts, or at least the pace at which those buildouts are occurring.

The problem, of course, is that as a cutting-edge new technology, integrating 5G into smartphones was initially an expensive proposition. As a result, no one was surprised to see that the first 5G phones were over $1,000—in some cases, quite a bit over. Not surprisingly, though, the result has been sales numbers for these devices that are respectable, but still only represent a tiny fraction of the overall US market. Throw in the economic concerns that people are now facing, and the prospect of selling a lot of expensive phones throughout 2020 is looking dimmer and dimmer.

Thankfully, and perhaps somewhat luckily (from a timing perspective), Samsung just announced a new series of lower cost smartphones for the US market, the A Series line, that includes the first mainstream 5G offering for the US that’s priced under the critical $500 barrier. The A51 5G, at $499, and the slightly larger A71 5G at $599, are expected to come to all the major US carriers sometime this summer. Both phones offer large OLED displays (6.5” and 6.7” respectively) as well as high-quality, quad-camera systems (48 MP and 64 MP maximum resolution respectively), large 4,500mAH batteries and, wait for it, headphone jacks!

Most importantly, both phones include support for 5G. Even better—as Samsung has now confirmed—there will be a single version of each phone that supports both sub-6 and millimeter wave. Early on there were reports that there might be separate versions of the phone for each “flavor” of 5G (and that was referred to in an earlier version of this column), but that is not going to be the case, which is a very positive development.

There are still questions about which chips will be powering these devices, but those details will come later. The other big of good news is that Samsung will be working with all the major US carriers on these phones, so you’ll be able to use them across Verizon’s mmWave 5G, and presumably both AT&T and T-Mobile’s sub-6 and mmWave 5G networks. Getting 5G phones into the hands of more people is a critical step in the 5G network transition and breaking the $500 price barrier should make a big difference there.

In addition to 5G support, the other interesting and timely thing about the A Series launch is that it represents the beginning of what could be a significant push for mid-tier smartphones in the US. In most countries around the world, mid-tier phones—typically in the $300-$700 range—make up the vast majority of shipments, but in the US the market can essentially be broken down to low-end phones primarily targeted at the pre-paid market (where customers pre-pay for their phone service and typically use less capable phones) and the premium market, such as iPhones and Samsung’s S or Note Series.

Companies like Motorola and a few others have been serving the US mid-tier market for many years, but the truth is they’ve had a relatively modest impact here. With the launch of Samsung’s powerful, yet modestly priced A Series, and the expected launch of an updated low-cost iPhone SE anytime now, a significant emergence of a mid-tier smartphone market could finally happen here in the US. Obviously, these vendors couldn’t have foreseen that these launches would occur during the economic downturn caused by the COVID-19 pandemic, but the timing could prove to be fortuitous. The overall smartphone market is expected to decline in 2020 and high-end phones even more so—so well-equipped smartphones that give consumers what they need at a price they can afford are going to be extremely important this year.

Disclosure: TECHnalysis Research is a tech industry market research and consulting firm and, like all companies in that field, works with many technology vendors as clients, some of whom may be listed in this article.

Forbes columnist Bob O'Donnell is the president and chief analyst of TECHnalysis Research, a market research and consulting firm that provides strategic consulting and market research services to the technology industry and professional financial community.