The 5G radio is an impressive feat of technology. Sometimes you will see 5G referred to as "5G NR." The "NR" stands for New Radio. There are many factors in the increased sophistication in 5G radios. These are some of the most important ones:
Encoding digital data more densely into the radio signal
Transmitting and receiving signals simultaneously
A wider range of strategies for encoding data
Forming and steering "beams" of radio entergy
Using more radio spectrum, if available, for an individual user's data
5G includes a lot of techniques, like those listed above, that yield higher performance, but that are not a breakthrough. 5G radios put bits of data on radio waves in much the same way as LTE radios. It would be fair to say that 5G NR is an evolution of LTE radios.
Digital radios have a lot of their modulation techniques in common, across mobile networks, WiFi, Bluetooth, LoRa, Sigfox, and other digital radios. Yet each of these radio standards has different performance characteristics in power requirements, computing requirements, range, bit-rate, and how capacity is shared among users. If you want to know more about how digital radios work, this page explains quadrature amplitude modulation.
Choosing the optimal balance of performance characteristics is what enables higher density, as in "Encoding the digital data more densely into the radio signal."
These performance characteristics are deliberate engineering choices that make a particular radio standard suited for purposes like short range high performance wireless LANs or long-range low-speed connections for networks of sensors. The success, or lack of it, for each of these standards is a result of whether the designers of the standards got it right, and how the implementation of standards evolves as they are put in practice.
In addition to increased sophistication in radio technology, 5G makes use of radio bands above 30 gigahertz, also referred to as millimeter wave bands. 5G relies on these high frequency bands to provide very high speed links, in the gigabits per second.
Billions of bits per second sounds pretty great, but millimeter wave radio bands have limitations: radio waves in this range can't penetrate many walls, or even some windows. They need a line-of-sight between the sending and receiving antennas. They go less far when it rains, or through dense foliage. If you use a phone case you will need to check that it is made of material that does not attenuate millimeter wave signals too much.
The ability to form and steer beams of radio energy, called "beamforming," can enhance the ability to use millimeter wave bands, but using this capability effectively is challenging.
5G capabilities require a lot of computing power. Simultaneously receiving and transmitting requires twice the radio hardware and computing power. Beamforming requires a lot of computing, too. So does fitting more bits into the same amount of spectrum, and using more spectrum.
The economics of putting increasingly complex digital radio technology into mobile devices is favorable because billions of people buy and use mobile devices. The first 5G phones were more expensive by hundreds of dollars. They were thicker and heavier. Their battery life was poorer. But, as more people buy 5G devices, the cost of making 5G chips, and the incredibly complex 5G software and chip designs, is destined to decline. The chips will get more efficient and less expensive. But that will happen over the course of several years.
There is no substitute for iterating designs over multiple product and chip fabrication generations when refining chip designs. Mobile chip makers continue to refine the designs of all the digital radios in their chips. You can expect better LTE performance in new chips, with or without 5G capability. You can expect more clever designs that, for example, share hardware resources among WiFi, Bluetooth, and mobile radios to reduce the cost of chips. You can expect power consumption to drop.
By now there have been enough product generations of 5G chips and the phones that use those chips, that your 5G phone experience will be back to what you experience with LTE, and 5G phones will cost a little more than LTE phones. Battery life is also back to normal.
If this were the whole story the result would be that data on your mobile device will be somewhere between the same and ten times faster, and occasionally, in some locations, 100 times faster. But 5G is not just a sophisticated radio. It is also an optional, but very ambitious, new kind of network behind the radios.