As of late, talks of unveiling 5g technology, along with its conspiracy theories, have become all the more prevalent on the internet. What is 5G exactly?
Well currently, many of our phones and other devices are running on 4G networks, which is measure in megabits per second (Mb/s). The 4G network currently in place today has become more and more cluttered with more users pairing their devices, which means that overall service and speeds go down. However, the new 5G network is said to be able to deliver data 10 to 100 times faster than the old 4G and is measured in gigabits per second (Gb/s).
To put this into perspective, that video game update on your PS4 that takes hours to download would only be a matter of seconds on 4G.
With its capabilities, 5G opens up a whole new world of technology and enables the use of things such as self-navigating cars and Virtual Reality.
Again, let's go back to the 4G network and its congestion of users. The wireless networks that we currently operate on are at a certain radio-frequency, and so network providers want to reach a higher frequency for millimeter waves to give consumers the best 5G experience. They are looking at wave frequencies in the 30-300 gigahertz range, 10-100 times higher than the waves currently being used today for 4G and wifi. This is all in order to create new routes where there's no congestion.
The only problem is: these millimeter waves are tiny and can easily be blocked by objects and buildings.
For that reason, so-called "small cells", which essentially operate as smaller radio towers, have to be placed in multiple places so that 5G users can still get a connection while they move around. The 5G device automatically switches between the nearest towers as it's traveling.
With companies such as Apple already announcing the release of there 5G iPhone later this year, you might be wondering how you can profit off of this technological advancement
Here are two 5G companies that have potential:
In 2019, AT&T spent its time expanding its 5G network reach and technology. In 2020, the company proved that the technology was delivering much higher speeds.
In its early testing days, their "5G plus network" saw 200-300 megabits per second speeds. However, by April of this year, the company was able to hit a peak speed of 2Gb/s in Atlanta. In order to continue progress, AT&T looks to expand signal strength and connectivity to better user experience.
From there 2019 annual report, AT&T states to have record free cash flow to the tune of $29 billion, along with 2% growth on wireless service revenue and $23.7 billion gross capital investment.
The stock is currently trading at $29.90, down 21% from its late-February average of around $38 per share. With an about average p/e ratio of 15.24 and a yield of 6.83%, this stock is definitely worth adding to the watchlist. As things get back to normal and people start to move around, watch for data service to increase in demand and share prices to go back up.
A company that can be seen in the portfolios of many investors, Apple is set to embrace the 5G innovation by releasing their 5G iPhone 12.
Although no official release date has been determined, it's possible that the company is aiming for a late 2020 release (you know, once the pandemic clears up) and have set price points, not too far off from the iPhone 11, with the 5.4-inch iPhone 12 going for $649 USD and the 6.1-inch going for $749 USD. The phone comes equipped with the ability to connect to T-mobile and Verizon's 5G networks.
With apple's stock price sitting at $289.07 after their Q2 earnings report, it's tough to say whether the company will experience any immediate share price growth, even with the news of their new iPhone technology. However, Apple has a history of being a winner and it never hurts to keep tabs on a company that's coming out with the latest technology.
There you have it, a bit about the background of 5G and two companies that could potentially see some fantastic growth once 5G networks really go mainstream. Some other 5G companies include Qualcomm, Ericsson (ERIC), and Verizon, which are responsible for either creating 5G technology or distributing it.
Any thoughts? Feel free to comment below.