Huawei planning $300 5G phone

Peter Zhou told FT “Next year, some people say we may see [5G] smartphones at $300 and I think that’s very much possible.” That price makes sense.

Huawei sells the Mate 20 Lite for about US$250. The additional parts for 5G probably cost US$30-60 this year. By next year, the price for the 5G parts – and the basic phone – will be lower.

All the 5G phones shipping today cost over US$1,000, establishing an image of luxury. The high cost hasn’t deterred the Koreans, who sold more than 400,000 the first two months. (Some with a carrier subsidy,)

The US$600-700 Xiaomi Mi Mix 3 5G phone with slider is available already from Vodafone in England.

It has a Qualcomm Snapdragon 855 rather than the 845. The difference should be US$10 or 15. The battery is a little larger, perhaps US$5 more.

The radio frequency front end parts need to support more frequencies and more complicated signals. 5G requires special amplifiers and other parts.

Prices for parts like that are not made public. Based on the cost projections of the part makers, I’d expect an addition US$15 to 20.

The difference between 4G and 5G models today should be US$30 to 60. The US$100 price difference easily cover the extra cost.

British Telecom and Vodafone were about to sell a similar Huawei Mate 20 5G before MI5 stepped in. Both companies said they were suspending sales of the Huawei phone. The units will be back on sale if the security forces allow it.

Huawei is selling 50 million phones per quarter and has economies of scale that keeps the cost down.

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