The next generation of cellular technology, known as 5G (or the fifth generation), will let you download an 8 gigabyte HD movie in six seconds instead of the current seven minutes, according to China-based telecom company Huawei.
That's just one reason 5G was a hot topic at last week's Mobile World Congress (MWC), an annual event in Barcelona where the wireless industry comes together to show off its latest products.
This new generation of wireless networks will also allow for lower latency, or the time it takes for one device to send data to another device. This will enable it to be integrated into driverless cars for such applications as being able to detect a wreck ahead and put the brakes on faster.
When 5G is built out, download speeds will go from 1Gbps (gigabit per second) to 10Gbps. The latency rate will go from about 50 milliseconds to about one millisecond, according to Recode.
Companies that stand to benefit from 5G include Cisco (CSCO - Get Report) , Juniper (JNPR - Get Report) , Red Hat's (RHT) OpenStack, Twilio (TWLO - Get Report) , IBM (IBM - Get Report) , Broadcom (AVGO - Get Report) , Integrated Device Technology (IDTI) and Xilinx (XLNX - Get Report) analysts say.
5G will be more enterprise-driven than consumer-driven, said Daryl Schoolar, Ovum's principal analyst of wireless infrastructure.
He also noted that 5G will not replace 4G. Instead, 5G will be released in concentrated pockets across the world. He said to picture little red dots on a map to represent coverage areas for 5G, rather than large colored sections of a map. For example, there may be a red dot covering a business pocket of a larger suburban area. This is partly because when you go up to 10Gbps from 1 Gbps, coverage falls, he said.
While some industry analysts remain skeptical about the timeline or even the possibility of 5G, Schoolar said it will definitely happen but that it will take time. He said those who attended the MWC were "more realistic now that optimistic."
At the conference, Ericsson (ERIC - Get Report) predicted that 5G could be a $1.23 trillion opportunity for the wireless industry by 2026. The company also predicted that 5G would operate as a "business model," rather than just a "technology platform," according to a note released by Drexel Hamilton CFA Brian White on Monday.
In other words, 5G will be "a more versatile network," Schoolar said. Earlier networks were about new radios and radio innovations, but now radio technology is hitting its limit. That's why 5G is more about antennas and network virtualization.
The GSM Association, which represents the interests of mobile operators across the world and organizes the MWC each year, predicted 1.1 billion 5G connections by 2025, or about one in eight mobile connections worldwide.
KeyBanc Capital Markets released a note on Monday that claimed 5G felt "less overhyped" at the 2017 conference than in previous years as companies seemed to have concrete goals, rather than just ambitions. It expects the first commercial deployment to be in Japan and Korea in 2019. "While the specifications have yet to be finalized, conversations at MWC seem to indicate more certainty that 5G will happen, as operators focused more of their discussion on the types of applications and use cases for 5G," the firm wrote.
KeyBanc also expects less volatility in the rollout of 5G than was seen with 4G. "Feedback from MWC indicates that operators will continue to roll out enhancements to 4G (i.e., 4.5G), such as 4x4 MIMO, 4-channel carrier aggregation, and massive MIMO, and will begin to weave in 5G deployments with 4G," Drexel explained. MIMO stands for "multiple input, multiple output" and is an antenna technology that refers to using multiple antennas for transmitters and receivers on wireless devices.
Software and cloud companies stand to benefit from the creation of 5G networks, Drexel noted. Network architecture concepts known as software-defined networking (SDN) and network functions virtualization (NFV) will become more important, too -- both of which Cisco and Juniper have been "aggressively investing in over the past few years," the firm said.
Red Hat's open-source platform for cloud computing OpenStack should also benefit from the build-out of 5G and the corresponding rise of the Internet of Things (IoT).
Twilio also expects to get a boost. Company CEO Jeff Lawson said during the conference that Twilio has been focused on the increasing importance of software. Lawson said that if companies want to succeed in the digital world, they will have to think like "software people."
Drexel also noted that 5G will help enhance artificial reality (AR) and virtual reality (VR) experiences. When it comes to cognitive computing, IBM is the furthest along. However, Telefonica (TEF - Get Report) is working on a cognitive intelligent initiative called "Aura." In addition, Apple (AAPL - Get Report) seems to have "burning ambitions" in the world of AR and VR, Drexel's White wrote.
KeyBanc's favorite 5G plays are semiconductor companies Broadcom and Integrated Device Technology, and chipmaker Xilinx.
Schoolar also sees chipmakers as being big beneficiaries because they will have the most volume as new technology is released that is supported by 5G.