“The global race to own 5G technology is on – and China is winning.”
That’s what CNN published back in 2018. CNN was reporting on a new analysis that said China was leading the world in 5G technology. The U.S., the report said, was a distant third.
You’ve likely heard of 5G. It’s the next generation of wireless network technology that will eventually replace today’s 4G networks. And 5G speeds promise to be – on average – 100 times faster than today’s wireless networks.
Slow-loading web pages and dropped calls will be a thing of the past. And 5G will also enable a suite of new technologies like self-driving cars, holographic telepresence, and even robotic surgery.
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I’ve worked as a technology executive going all the way back to the 2G era. So believe me when I say that 5G isn’t just evolutionary. It’s revolutionary.
It’s estimated that 5G will ultimately usher in $12.3 trillion in wealth. And the country that sets the 5G precedent will be the economic powerhouse of the next decade.
That’s why countries like the U.S. and China are racing to be the leader in 5G.
But if you’ve been reading the mainstream press, you’ve likely seen headlines like this…
“America can't afford to lose to China in the 5G race”
“Here's how the US can beat China in the race for dominance in next generation networks”
If you listen to this reporting, you’d think America was losing the 5G race to China or that America’s 5G technology is somehow lagging.
There’s just one problem with that narrative.
It’s utterly wrong…
Where’s America’s Huawei?
When most people imagine 5G networks, they think of 5G base stations, antennas, or miles of fiber-optic cables. In short, they picture the physical infrastructure that makes a 5G network operational.
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As a reminder, 5G uses what’s known as “small cell architecture.” It requires far more tower locations. Today, there are more than 200,000 cell phone towers scattered across the U.S.
But when the 5G networks are complete, there will be more than one million cell towers erected to support these networks. For major metropolitan areas, that could mean a cell tower on almost every street corner.
And there are only three companies in the world that have end-to-end solutions for that sort of infrastructure. They are Ericsson, Nokia, and China’s Huawei.
But the United States doesn’t have an “American Huawei.” Therefore, the country is in danger of falling behind in the 5G race. That’s the typical argument we hear.
U.S. Attorney General William Barr even suggested that the United States should consider taking a controlling stake in Nokia and Ericsson to counteract China’s Huawei.
That’s ridiculous.
The truth is that America leads the world in 5G technology. Here’s why…
America’s 5G Dominance
If you were to get your hands on one of these 5G base stations or antennas and open it up, do you know what you’d find?
You’d discover that this infrastructure equipment is loaded with American technology and intellectual property.
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That’s right. These base stations and antennas have thousands of dollars’ worth of American tech… mostly American semiconductors. These are the “brains” that make this 5G equipment work. There is no other country in the world that comes close to America’s dominance in this technology.
And dominating the world in semiconductor technology is very profitable.
First, look at the quarterly gross profit margins of companies that the mainstream media typically label “5G companies.”
- Ericsson: 36.81%
- Nokia: 39.29%
- ZTE: 34.27%
Now look at some of the American companies that provide essential 5G components.
- Qorvo: 42.36%
- Qualcomm: 58.38%
- Cisco : 64.67%
The American 5G component companies are way out ahead when it comes to gross margins. Which companies would you rather own? I think the answer is clear.
The next time you see a story from the mainstream press claiming that the United States is falling behind in the race to 5G, you’ll know it’s bunk.
Let me repeat it: American companies lead the world in critical 5G technology.
And for investors, this presents a once-in-a-decade opportunity…
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5G is inevitable. Several 5G companies will soar hundreds of percent. Others will soar thousands of percent. But the time to get positioned is right now.
Regards,
Jeff Brown
Editor, The Bleeding Edge