5G phones are expensive, but MediaTek wants to change that

While we’ve seen the 1Gbps download speeds that we were promised with 5G, it’s only been in expensive flagship phones like the Samsung Galaxy S10 5G, adding price to the list of obstacles standing between the average user and the super-fast mobile networks of the future.

But that won’t always be the case. Taiwanese chipmaker MediaTek’s processors have been at the core of affordable handsets since the dawn of smartphones, and the company has aimed them at a mid-range price point they refer to as the ‘new premium.’ The company’s just introduced its first 5G-capable chip, which is high-performing enough to be considered for flagship-competing devices.

The phone manufacturers which pick MediaTek’s chips decide for themselves how affordable their devices are, but given how much the company prioritizes value, we wouldn’t be surprised if handsets with this 5G chip are cheaper than the currently announced 5G phones headed to markets. While the limited-availability Moto Z3 with 5G Moto Mod costs around $699 (£552, AU$1,009), other phones capable of tapping into 5G are expected to follow the Samsung S10 5G’s price point of $1,229 (£1,026, AU$1,876). 

And even if MediaTek’s first 5G chip doesn’t end up in more affordable phones, the ones that follow may lower the price barrier to entry for 5G networks.

“Ultimately, the OEMs make the decision about what features, memory, displays and cameras they put on a device and price it appropriately. We think this particular product is probably positioned more at the high end, but MediaTek’s focus on the longer term will come back to focus on the ‘new premium’ tier in the 5G generation as well,” said Finbarr Moynihan, general manager of international sales at MediaTek. 

This is the first we’re hearing from any chipmaker about when 5G’s cost will come down to Earth.

MediaTek’s chips don’t often make it into phones that reach the US – not yet, anyway, though they’re in plenty of other products like Amazon Echo speakers. But being at the forefront of 5G (and affordable 5G at that) could entice phonemakers that have previously picked Qualcomm’s chips. In other regions where MediaTek’s processors already end up in handsets, this new 5G chip could lead the charge in the first year – and set an example for US OEMs and carrier networks to notice.

To be clear, MediaTek’s 5G chip isn’t necessarily the most powerful on the market, as the company made a few compromises to lower costs, betting large on some parts of 5G while ignoring others. All in all, here’s how you make a 5G chip cheaper – and how that affordability could potentially transition to 5G as a whole.

 How to lower the cost of 5G 

Perhaps the most striking choice MediaTek made is more strategic than technical. Broadly speaking, there are two categories of 5G mobile companies are considering: millimeter wave (abbreviated mmWave), typically considered 24 to 90 Ghz, and sub-6, frequencies at or below 6 Ghz – which includes the 2 Ghz to 8 Ghz ranges where 4G usually operates. MediaTek’s first 5G chip will work only on sub-6, saving costs and design space by leaving off mmWave-connecting tech.

MediaTek is making a bet that sub-6 will catch on in markets that favor OEMs that use its chips, and given that carriers already occupy those 2 to 8 Ghz spaces, it’s not a stretch to imagine. Plus, those frequencies extend farther, allowing less robust networks to cover more area. Sub-6 may not reach the high speeds of mmWave networks, which we’ve already seen demonstrated in Verizon’s very limited 5G setup in Chicago, but their geographical coverage is superior.

To get more technical, MediaTek shrunk this chip to 7nm, which has a host of advantages: less silicon to traverse means faster speeds and lower energy drain, which means less heat is generated – which is helpful for devices held in hands or pressed against faces, Moynihan noted in a briefing on the new chip.

Another way to reduce chip footprint and increase efficiency: move to single-chip solutions. Their new Helio M70 5G modem is built into the chip, unlike, say, the Snapdragon 855 and Snapdragon X50/X55 combo that powers the likes of the Samsung Galaxy S10 5G.

“We’ve moved very aggressively into single-chip integration. A lot of solutions out there for 5G are hybrid fusion two-chip solutions. Those have size, cost, and power challenges that people have to deal with,” Moynihan said.

 The 5G roadmap from MediaTek’s perspective 

While Moynihan didn’t identify which companies would be putting out the first phones packing MediaTek’s 5G chip, he did note they would be coming in the first quarter of 2020, and it would be fair to assume that the first products would launch in China. We will see it coming to other regions next year after that, he added.

Even if a MediaTek 5G device were definitively headed to the US, though, there may not be a sub-6 network ready by next year: currently, only T-Mobile and Sprint (after their still-uncertain merger) are making noise about providing sub-6 capability on their networks. Which runs counter to how Moynihan expects the rest of the world to build their 5G setups.

“We think the sub-6 flavor of 5G will become the high-volume, worldwide, mainstream 5G technology,” Moynihan said. “We are developing millimeter wave technology, but there’s clearly a step function both in terms of devices and infrastructure around how you build a 5G millimeter wave network, and devices that support that with specialized radio capabilities. That’s going to probably keep millimeter wave at those super high-end prices for awhile, and it will be some time before it trickles down.”

Price will likely keep 5G out of reach for consumers who can’t afford the top-tier devices currently slated to support it. But even for those who can, there admittedly isn’t much reason to seek out the advanced networks – aside from downloading media very fast. Companies are hunting for great use cases that prove we need 5G.

“I think everybody is trying to figure out if there’s a killer app that will drive 5G. I don’t think we’ve identified that as an industry just yet!” Moynihan said. 

Which isn’t to downplay the value of speedy downloads, which he feels will be useful for “a whole host of applications – even ones we haven’t discovered yet. And it will make even mundane-yet-desperate situations a thing of the past, like the liminal moments before losing signal when you could benefit from hyper-fast downloads. Think about standing in line to get on a flight and suddenly remembering about a TV show season you wanted to download.

Upload performance will be improved, too. You don’t have to look far to see the YouTube and influencer crowd who will benefit from quickly-uploaded video. Streaming gaming, too, will benefit from 5G, thanks to those swift download/upload speeds.

Before that happens, 4G LTE networks will have to reach parity. In certain geographies and certain regions, Moynihan said, the 4G LTE networks have not been built out to the extent of US carriers – in Asia and China in particular. But if those 5G networks are built out swiftly, which China seems willing to do, the US might be playing catch-up. The one to watch in the US is the T-Mobile-Sprint network (should the merger go through), which would put their combined networks in a nice sub-6 position.

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