“5G” is a buzz term that you probably hear a lot in the media, for good reason. It’s coming and it promises to be a game changer.

5G is the next-generation (fifth) of wireless technology systems. But more important than what it is are the benefits it brings.

Before we get into that, let’s quickly review how far we have come in wireless communications in just a few decades.

The Humble Beginnings

The first generation (1G) network was launched in Tokyo back in 1979. 1G used analog signals. There were a lot of problems. Coverage was poor and sound quality was bad. Calls had no encryption, so it was possible for anyone with a radio scanner to eavesdrop. There was no compatibility among different systems. The phones were clunky and expensive (costing thousands of dollars). Still, 1G boasted millions of subscribers worldwide, though it was used mostly by businesses and executives, rather than average Joes.

Then the first 2G network was launched in Finland in 1991 using the Global System for Mobile Communications (GSM) standard, which relied on digital signals. The 2G network was a leaps-and-bounds improvement over 1G. Encryption became possible and the sound quality was much better. Text and multimedia messages were available functions. However, data transmission speed was limited to 64 kilobits or less per second. Despite limitations, 2G was revolutionary at the time and cell phone use became increasingly common.

The 2000s saw the launch of 3G, which combined aspects of 2G with new technologies and protocol. 3G used a method called packet switching to improve transmission speeds. 3G networks could typically deliver transmission speeds of about 3 megabits per second. This made wireless data consumption much more viable and enabled functions such as video conferencing and video streaming.

Era of the Smartphone

4G (the current generation) was first deployed in Scandinavia in 2009 but it was in the 2010s that it really proliferated, ushering in the era of the smartphone. The tremendous improvement in speed and reliability over 3G made data-intensive tasks such as gaming and high definition video streaming anywhere anytime on the mobile phone a reality, resulting in the explosive growth of mobile data consumption that shows no sign of stopping.

While a user can go from 2G to 3G by changing the SIM card, the jump from 3G to 4G required an entirely new device specially designed to work with 4G. This means that 4G created tremendous business opportunities. An example of a big winner is Apple (NSDQ: AAPL), which through its iPhone rode the wave to become the trillion-dollar company that it is today.

As you may have noticed so far, it takes about 10 years to develop a new generation, and each generation represents a huge leap beyond the previous one.

5G on Its Way

The 2020s is positioned to be the decade of 5G, which compared to 4G offers faster speed, shorter delays, and greater connectivity (more users and devices can communicate over the network at the same time).

As fast as 4G is, its latency (the time required for data to go from one place to another) of about 50 milliseconds is still too slow for applications that require a real-time response. 5G could reduce the latency to around 1 millisecond.

While this speed allows you to stream and download content even faster, 5G means a lot more. 5G will greatly expand the application of the Internet of Things (IoT).

IoT represents a system of digital devices that can communicate with one another and transmit data over a network without any human intervention. There are many applications of IoT today. Examples include the smart home, which automates lighting, HVAC, and security systems, and wearables such as devices that monitor the wearer’s health status.

Looking into the future, 5G could open up a world that may have felt like science fiction not that long ago.

For example, there’s no way a 4G network can support a world full of self-driving cars. The network would be overwhelmed. The delay in communication between the computer in such cars and the server could be the difference between life and death. But 5G provides the wherewithal to make autonomous vehicles a pervasive reality.

For consumers, the improvements that 5G brings could mean much more convenience. For investors, knowing which companies are well-positioned to provide solutions for 5G could lead to big gains.

Which brings me to a once-in-a-lifetime opportunity. Our investment team has pinpointed one small technology company instrumental to 5G. It’s a largely unknown but vitally important innovator and it’s poised to soar in tandem with 5G’s global implementation. Click here for details.