Three years of declining smartphone sales are expected to reverse next year as consumers buy into the 5G market.
Global smartphone shipments are expected to grow in 2020 after three consecutive years of market contraction, fueled by 5G plans in China, according to the International Data Corporation (IDC).
The (IDC) Worldwide Quarterly Mobile Phone Tracker shows that the worldwide smartphone market is predicted to grow 1.5% year over year in 2020 with shipments of 1.4 billion. The IDC expects that 190 million 5G smartphones will ship next year, and these will make up 14% of all smartphones shipped. This is far more than the first year of 4G smartphones when they made up 1.3% of all smartphones shipped in 2010.
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“Recent developments in the China market along with anticipation of aggressive activity from the smartphone supply chain and OEMs have caused us to raise our short-term 5G forecast,” said Ryan Reith, program vice president with IDC’s Worldwide Mobile Device Trackers, in a press release. “There is little doubt that China will quickly become the lead market in terms of 5G volume, but other important markets like the U.S., Korea, United Kingdom, and Canada are all expected to help drive 2020 volume. The real story here is around pricing, which includes both hardware and service. We are very confident that 5G smartphone prices will come down quickly in order for this market segment to grow.”
Smartphone sales have dropped for three straight years, so there’s nowhere to go but up with the introduction of 5G. This matches what Gartner also reported today, with analysts predicting 5G sales in China driving sales in Q1 of 2020.
According to the report, “Android vendors are expected to drive down the cost of 5G smartphones starting with an abundance of first quarter announcements at both CES and MWC. Apple’s entrance into the 5G smartphone market is highly anticipated for a September 2020 announcement with the real focus around pricing and market availability.”
“Apart from the expected rapid 5G growth in China, we also can’t miss watching other markets such as Australia, Japan, and Korea in Asia/Pacific as well as some European countries that have picked up 5G slower than predicted. Shipments so far in the second half of 2019 have come in much lower than expected and price points are not quite at the premium. Accelerated 5G adoption globally will depend a lot on factors like the arrival of 5G networks, operator support, as well as substantial price reductions to offer more affordable 5G devices,” said Sangeetika Srivastava, senior research analyst with IDC’s Worldwide Mobile Device Trackers, in the report.
Android: Android’s smartphone share will increase to 86.6% in 2019 from 85.1% in 2018 mostly due to 5G launches and expanded product portfolios of global Chinese players. Volumes are expected to grow at a five-year compound annual growth rate (CAGR) of 1.7% with shipments of 1.3 billion in 2023. Android ASPs are estimated to grow by 1.5% in 2019 to US$258, up from US$255 in 2018, with a push from the new devices becoming available in 2H19.
iOS: 2019 will remain a challenging year for iPhone shipments with volumes expected to drop to 185 million, down 11.4% year over year, mostly due to stressed market headwinds as well as a lack of 5G devices. However, Apple is likely to deliver 5G handsets later in 2020, which will pick up iOS volumes slightly. It will have an edge over other vendors with a better 5G understanding to launch iOS 5G devices.
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