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A quiet but massive segment of phones may get 5G for the first time next year

That's thanks to MediaTek's new 5G processor that will power sub-$250 prepaid smartphones.

5G likely will come to inexpensive prepaid phones in 2021.
Angela Lang/CNET

Next year, 5G won't just be for pricey handsets, thanks to a push by the companies making chips for the devices. 

MediaTek on Tuesday joined Qualcomm in introducing 5G processors for less expensive smartphones. The Taiwanese company's Dimensity 700 will enable 5G phones that cost less than $250. And it likely will address an important market: prepaid smartphones in the US, said Finbarr Moynihan, MediaTek's general manager of sales.

"Dimensity 700 is the device that's going to enable mass market 5G phones," Moynihan said in an interview ahead of Tuesday's news. He noted the chip will be in prepaid phones in the US and Europe next year and will arrive in Chinese handsets this year. 

Most people in the US have what's called postpaid cellphone plans. They sign contracts with companies like Verizon, AT&T and T-Mobile and have an allotment of data to use each month. When it comes to 5G, the plans tend to offer unlimited data. But about 80 million people in the US -- about a quarter of all phone users -- tap into prepaid plans from carriers like Republic Wireless and T-Mobile's Metro. Customers pay up front for a set amount of data and can re-up their data when they run out. Because the plans tend to attract people with poor or no credit, prepaid users often seek out less expensive phones. So far, that hasn't included 5G devices. 

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The first smartphones to hit the market with 5G were pricey. They often commanded a steep premium over their 4G variants and also required premium service plans. But prices for 5G phones have been falling quickly over the past several months as the novel coronavirus hurts consumer spending and as wireless providers push people to 5G as fast as possible. Many handset makers have introduced mainstream devices alongside or shortly after pricier flagship models. New, premium models, like Samsung's Galaxy S20 lineup, have seen steep discounts. And even Apple even kept the price of its iPhone 12 Pro lineup steady with last year's phones, despite the fact the new models include 5G connectivity

But 5G still hasn't expanded to many devices that cost less than $500, at least not in the US. TCL's $400 10 5G UW is the cheapest phone on Verizon's network this year, but 2021 should see even less expensive smartphones. Ultimately, 5G is expected to be a game-changer, but for many consumers right now, it's just an extra cost. The introduction of cheaper devices can help change that. 

"Clearly this year 5G became kind of standard in flagship phones," Moynihan said. But the Dimensity 700 "will start to close the gap between 4G wireless and 5G [handsets] coming into the market."

Taking 5G mainstream

There are really only four companies in the world making 5G chips: Qualcomm, MediaTek, Samsung and Huawei. Samsung and Huawei largely only use their 5G chips in their own devices. Qualcomm has supplied 5G modems for the vast majority of high-end phones this year, including the new iPhones. MediaTek, for its part, has predominantly supplied modems to Asian handset makers. But it sees the shift to 5G as a way to break into the US handset market. In August, LG's Velvet became the first smartphone to use MediaTek's processor -- the Dimensity 1000c -- in the US

In September, Qualcomm, said it would bring 5G to $125 phones from Motorola, Oppo and Xiaomi next year. The company, the leader in 5G processors, said the super-fast connectivity will be in its upcoming Snapdragon 4-series lineup.  

MediaTek on Tuesday said its Dimensity 700 is based on 7-nanometer manufacturing technology, integrates two Arm Cortex-A76 big cores in its oct-core CPU and operates at up to 2.2GHz. It taps into the slower but more reliable form of 5G that's favored in China and by T-Mobile in the US. The processor takes advantage of 5G carrier aggregation to enable faster speeds and also supports dual 5G sims. 

The Dimensity 700 comes with a battery-saving technology called MediaTek 5G UltraSave that intelligently manages a phone's 5G connection to consume less power. It supports 90Hz, high-def displays; 48-megapixel or 64-megapixel main camera sensors with night shot and AI-enabled bokeh effect; and voice assistants from brands such as Alibaba, Amazon, Baidu, Google and Tencent.

The new Dimensity 700 follows MediaTek's Dimensity 800 from earlier this year and its high-end Dimensity 1000 from a year ago. During its conference Tuesday, MediaTek also teased its next chip for flagship phones. The company didn't detail the name but said it will be based on more advanced 6nm process technology (the most advanced chip sizing today is the 5nm used in Apple's new A14 Bionic Processor).

MediaTek's upcoming high-end processor will integrate Arm's newest premium cores and will be capable of speeds of up to 3Ghz. It will show up in phones in the first half of 2021, starting in China, Moynihan said.

Phone-like computer

Along with the phone chip news, MediaTek on Tuesday introduced two new chips for Google Chromebooks.  The MT8192 is based on 7nm technology and is aimed at mainstream devices. The MT8195 is 6nm and will arrive in premium Chromebooks with sleek, lightweight designs and long battery life. 

Chromebooks powered by the MT8192 will hit the market in the second quarter of 2021, while premium Chromebooks using the MT8195 will arrive later in the year or in 2022.

MediaTek's Chromebook chips come as Apple on Tuesday prepares to introduce Macs using its own Arm-based processor. They will also go up against new Windows machines that have been designed to be more like mobile devices. Qualcomm has partnered with Microsoft and PC makers like Asus to create what it calls always-on PCs, but the devices haven't sold in huge numbers. They may have great battery life and constant connectivity, but they haven't been able to match the performance of processors from Intel and AMD. 

Still, laptops have been selling well across the board as people seek out devices for working and taking classes from home. In the third quarter, global notebook and mobile workstation shipments soared 28% from the previous year, helping push overall PC shipments up 13% to 79.2 million units, according to Canalys. Shipments reached levels not seen since 2011, the firm said. 

"There's no secret with all the home schooling, Chromebooks have seen phenomenal growth this year," Moynihan said. He added that Apple's push to use its own Arm-based chips in its Macs will help the rest of the industry working on phone-like computers. 

Advancements at Arm and manufacturers like TSCM "can really bring some power and performance advantages for Arm-based [chips]," Moynihan said. "We see a lot of growth and strength in the Chromebook category."