The reason this doesn’t make sense to me is 5G will always have a much higher latency than any wired alternative
Not true. Really crappy wired solutions (because the provider's network is poorly maintained, or poorly designed) can easily be worse than a wireless solution. However for the sake of argument, lets assume that both the wired and wireless provider both have well designed and maintained systems.
A wired solution can absolutely have lower latency, but what latency are you okay with and are you willing to pay for much lower latency that you don't need? Consider the following scenario:
- wired provider latency = 20ms at a cost of $100/month
- wireless 5G provider latency = 40ms at a cost of $35/month
Assuming equal bandwidth would it be worth it to you to pay $65 extra dollars per month for 10ms less latency? How many consumers do you think care that much that are only streaming netflix, checking email, playing phone based mobile games? Those are real example costs from my area. If you are a Verizon cell phone customer can get from 100Mbs to 300Mbs at about 40ms latency for $35/month.
— it really only makes sense to sell this stuff in rural areas without the infrastructure. What’s more is the most recent carrier has a reputation for extraordinary coverage but their network is CDMA so their network speed is one of the worst in the city.
We're talking 5g here. It would be a really bad solution for rural areas. 5g is fast, but because of the broadcast frequencies the signal doesn't travel very far. Thats why you see so many more smaller 5g towers than tall 4g. A single 5g tower in a dense urban area can serve hundreds of customers, where that same tower in rural may serve 10 or less because the distance to customers is so much larger.
Wouldn’t it make more sense to sell this stuff elsewhere?
Nope, cities are the perfect market for 5g home internet. Zero wiring costs in high density urban residential spaces especially where incumbent wired providers have been abusing their customers for decades means customers are open to alternatives, especially at lower prices with better customer service.