Analyst Firms Are Raising Their Global 5G Forecasts

5G in the US is just now beginning to hit its stride, with operators like Verizon and Sprint launching 5G services in a growing number of markets and expanding their 5G handset lineups.

And though most analysts believe that sales of 5G-capable phones so far in the US have been relatively lackluster -- one estimate found that just 29,000 5G devices were sold in the second quarter -- a growing number of analysts are expecting that to change dramatically in the months and years to come. Analyst firms like Gartner, IDC and Nomura have recently raised their forecasts for 5G device sales globally.

Specifically:

Nomura now expects fully 512 million 5G smartphones to be sold in 2021, up from a previous forecast of 402 million.

Gartner raised its 5G phone sales forecast for 2023 by roughly 5%.

And IDC now expects around 28.1% of all phones sold in 2023 to sport 5G connections, up from a prior forecast of 26.3%.

The reason? Operators are pushing 5G harder than expected -- for example, operators in China are launching 5G services almost a year early. And 5G component suppliers are largely keeping up with demand. But more importantly, analysts believe that 5G phones are going to get a lot cheaper in the months and years to come, which will make it easier for large numbers of customers to access the technology.

CCS Insight in April said it expects connections to 5G networks will surpass 1 billion in 2022, taking a year less than 4G did to clear that milestone. The firm raised its own 5G forecasts last year.

The situation can mostly be attributed to analysts refining their forecasts as they obtain more data -- a common practice. "Sometimes an increase can also be the case of starting with a number that is too conservative and when more data points become available (expected new phone model for example) then you have to increase your forecast," noted Annette Zimmermann of Gartner.

But it's also due to the fact that operators across the world are pushing harder on 5G than almost anyone expected. "The big driver will be lower-cost 5G handsets especially those coming out of China," argued IDC's Anthony Scarsella.

Whether operators will be able to actually cash in on 5G remains to be seen. So far in the US, 5G has been sold as an add-on to existing plans, rather than a mechanism for new revenues. But that may change, considering Verizon recently began charging customers on its cheapest unlimited plan an extra $10 per month to access its 5G network.