Samsung was among the few companies that launched 5G smartphones in 2019. It ended up shipping 6.7 million 5G phones last year even though there were only a handful of 5G-compatible models in its entire lineup.
The company sees great potential for growth in 5G and it's counting on that to improve its fortunes this year. Samsung is in the unique position of benefiting both from the widespread consumer adoption of 5G smartphones and mobile carriers' shift to 5G networks as it also provides network solutions.
5G will be a key growth area for Samsung in 2020
Samsung pointed out in its Q4 2019 earnings release today that its revenues from the network business decreased compared to Q3 2019 because 5G adoption in South Korea was concentrated in the first half of the year. It was actually the first country to launch commercial 5G networks and Samsung's 5G equipment played a significant role in enabling local carriers to launch their next-gen networks.
However, it did see 5G revenue increasing in overseas markets such as the United States and Japan. Samsung's 5G network solutions have become more favorable as Huawei's network business continues to be encircled by issues related to its alleged links to the Chinese government. The United States has actively been calling on its allies to shun Huawei's equipment for their cellular networks. This has allowed Samsung to dominate the space.
Samsung rightly expects revenues from the 5G business to decline in South Korea as all major carriers have upgraded their networks already, but it's going to expand its 5G network solutions in markets across the globe. With carriers in a lot more countries set to launch their 5G networks this year, there's significant potential for growth in this industry for Samsung.
2020 will also see more 5G smartphones hit the market and Samsung's chip business will cater to that by offering a wider variety of 5G SoCs. Samsung's mobile business will launch more 5G smartphones this year, particularly in the mid-range segment, to maintain its lead as one of the top 5G smartphone vendors in the world.