By Samantha Bader
Samsung has made a major play in their quest to become a main supplier of 5G technology in America. The company, based in South Korea, signed a contract with Verizon worth USD 6.65 billion that runs through 2025 on September 8th. The deal is based around Samsung supplying Verizon with 5G chips and infrastructure.
“With this latest long-term strategic contract, we will continue to push the boundaries of 5G innovation to enhance mobile experiences for Verizon’s customers,” Samsung said.
Samsung already has deals with the American companies AT&T and Sprint, which points to their stated goal of acquiring a 20% market share in 5G technology by the end of 2020. Samsung shares went up 2.1% in the aftermath of the deal.
This deal is also a victory for Samsung, as they beat out Nokia and Ericsson, two Nordic companies, as well as Huawei for the contract. Nokia’s shares fell as much as 2.5% when the deal was announced. The Verizon contract would have likely gone to the Chinese telecom giant Huawei if not for the Trump administration’s continuous targeting of Chinese technology. Not only has the Trump administration made a habit of placing sanctions on Chinese companies, this past August, the administration banned all sales of chips from American companies to Huawei, and other countries have followed suit.
The United Kingdom and India, two massive 5G markets, have begun the process of phasing out their usage of Huawei products in their 5G networks.
Kim Young-woo, an analyst from SK Securities stated, “More companies will be turning to Samsung for their 5G equipment because of the US restrictions against Huawei and Nokia’s quality issues.”
The Trump administration has also targeted the hugely popular Chinese app TikTok due to concerns over user security and privacy, and has requested that an American company purchase the app. Of course, with an American presidential election in November, these targeted sanctions on Chinese technology may be short-lived should there be a change in administrations.
By all accounts, 5G is the next big frontier for technology. 5G smartphones promise faster, smoother streaming than any consumer has yet to experience, and Apple is also getting ready to unveil their new phones that are 5G compatible this fall. Those phones will be the first iPhones to be 5G compatible. As the iPhone is the most sold smartphone in the USA, a jump in the demand for 5G is expected to follow this release. Samsung is ahead of Apple in this area, as all Samsung new Note20 phones can connect to 5G. Both companies are also no longer charging consumers extra for 5G.
However, people who have experienced 5G have been left with mixed reviews, as current American 5G networks are often spotty or unreliable. Verizon only has 5G networks working in 35 US markets, though as part of this new deal, they hope to expand that to 60 by the end of this calendar year. This deal shows that Samsung is committed to becoming a main supplier of 5G technology, and will inevitably lead to stronger, more widespread 5G networks stateside.
Photo by Rodion Kutsaev, Unsplash