5G has barely hit the market and there is already a new, more powerful generation of wireless communication technologies being developed – the 6G network.
According to some reports, Apple is already spending $30 million a month to use an early 6G network, Facebook pays over $11 million a month for private access, etc. The NASA, the US department of State, etc. are spending on it as well. Below we look at what is 6G, how it differs from 5G and which companies could directly benefit from its commercial development.
WHAT is 6G?
6G will be the sixth generation of wireless communications technologies supporting cellular data networks. It will be the successor to 5G, and will likely be significantly faster. China has been reported as already starting research into the technology, and several notable companies (i.e. Nokia, Samsung, and LG) have also done so. South Korea and Japan also reportedly have interest. 6G will likely become commercially available in the 2030s.
With 5G networks still being deployed around the world and many areas of the globe still using 4G and even 3G networks, it seems a bit early to throw around the term 6G.
That said, technology always start to anticipate future customer needs and standards take a long time to mature, so we've always been on a path to a 6G world. We've managed to go from 1G to 5G in such a relatively short amount of time, so 6G is just the natural progression towards faster and better wireless connectivity.
HOW FAST will 6G be?
We don’t know how fast 6G will be yet. but even with the first iterations of 5G, we’re seeing everyday speeds of up to 1 Gbps. 6G will absolutely top that, but how much is still in question. We might see several hundred gigabit per second speeds, or even ranges in the terabytes. 5G’s bandwidth capacity lies in the fact that it uses high radio frequencies; the higher you go up the radio spectrum, the more data you can carry. 6G might eventually approach the upper limits of the radio spectrum and reach extremely high frequency levels of 300 GHz, or even terahertz ranges.
Experts are trying to guess how fast 6G will be. One of the most often quoted is from Dr Mahyar Shirvanimoghaddam from the University of Sydney, who claims 6G could deliver mind boggling speeds of 1TB per second, or 8,000 gigabits per second. This means that instead of waiting a few seconds for your Netflix movie to be downloaded with 5G, with 6G speeds it will take just one second to download around 140 hours of Netflix movies.
HOW different is 6G from 5G?
Speed and latency will be the clearest distinction between 6G and 5G. This is what separates 5G and 4G in terms of performance, so we can also expect 6G to be magnitudes of times speedier than 5G.
As we’ve seen in the past with 3G, 4G, and 5G, as the capacity of a network increases, so too will its applications. This will cause an amazing effect where new products and services can be built to utilize 6G’s bandwidth and other improved features to their fullest extents.
Anything that you use a network connection for right now will be greatly improved on a 6G network. Literally every single improvement that 5G brings will manifest as an even better, enhanced version on a 6G network.
With 5G, we’re already destined to have interconnected smart cities and farms, Artificial Intelligence at our fingertips, car-to-car communication, intelligent robotics working in factories, etc. 6G will continue to support all of those areas while also providing even more bandwidth that will ultimately expand innovation even further. Researchers and scientists are talking about 6G going beyond a “wired” network, with devices acting as antennas using a decentralized network not under the control of a single network operator. If everything connects together using 5G, 6G will set these connected devices free, as higher data speeds and lower latency make instant device-to-device connection possible.
6G may also bring about sci-fi applications like the integration of our brains with computers, and greatly improved touch control systems. NTT DoCoMo talks about 6G making it, “possible for cyberspace to support human thought and action in real time through wearable devices and micro-devices mounted on the human body.” (source: www.itu.com).
WHEN to expect it?
As mentioned earlier, 6G networks might roll out sometime around 2030, or at least that’s when most telecom companies will be running 6G trials and when we’ll see phone manufacturers tease 6G-capable phones.
However, it’s common for work to start as long as a decade prior to any real implementation of a new network technology, which might be why you’ll start hearing about 6G before you even have your hands on a 5G phone (source: www.lifewire.com).
WHO is working on 6G?
Just like 5G, most major companies and governments will work on 6G projects, and several are already talking about plans. Japan has most recently launched its 6G project, following a press conference in January 2020 where it announced an intention to lead standardization efforts and study challenges. The NTTDoCoMo report mentioned above paints the most exciting vision of what 6G could bring yet.
In November 2019 China announced the formation of a research team dedicated to 6G, while in Finland, the 6G Flagship research program is backed by Nokia, the University of Oulu, and other telecoms and business bodies. A 6G Summit business event took place in Finland in 2019, and will do so again in March 2020, where standards and other 6G topics will be discussed.
It doesn’t stop there. Both Samsung and LG have 6G research centers in South Korea, and SK Telecom, Nokia, and Ericsson are collaborating on a 6G research project. In its Canadian research center, Huawei is also said to have started its 6G research, following company founder Ren Zhengfei’s interview with CNBC in 2019, where he said, “We have parallel work being done on 5G and 6G, so we started out 6G a long time ago.”
In the U.S., President Donald Trump tweeted in February 2019 he wanted, “5G, and even 6G, technology in the United States as soon as possible.” (source: www.digitaltrends.com)
WHICH companies are likely to benefit from 6G?
As mentioned above, most of the large telecommunications companies are already working on 6G research.
But one specific company could benefit to great extent from the growth of 6G. Indeed, 6G will mainly be about improvements in processing power and computing speed. As of today, entities such as Amazon Web Services, Microsoft Azure or Google Cloud need the most advanced hardware in the world to power all these cloud computing, artificial intelligence, and machine learning applications.
One company makes the key components that run 97% of the pertinent hardware for these 3 Tech giants. This company is NVIDIA (NVDA), the pioneering GPU company whose high-end chipsets designed for better graphics processing have not only revolutionized video gaming but have turned out to be fantastically well-suited to the huge processing demands of “artificial intelligence” work.
As shown on the chart below, NVIDIA has been performing exceptionally well as new products have been introduced. As of today, NVIDIA is priced at a rich premium again (forward PE is up to 50x). While earnings estimates have somewhat improved in the past few months, the stock price has outpaced those estimate increases.
Chart: Nvidia (NVDA) price chart – source: www.investing.com
However, for investors taking the long-term view, pull-back could create some opportunities if the company continues to position itself as the market leader in key components for the hardware used by the Tech giants. Indeed, as explained before, web services are likely to be a major winner of the next generation wireless network.
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