Three years of falling smartphone sales are expected to reverse next year if consumers buy into the 5G market.
Separating the hype from reality in the first 5G mobile networks and smartphones
James Sanders and Karen Roby discuss the immediate future of 5G mobile networks and smartphones and how existing equipment cannot be upgraded to 5G through software updates.
According to the International Data Corporation (IDC), the worldwide shipping of smartphones is expected to grow in 2020 after three consecutive years of market contraction fueled by 5G plans in China.
The (IDC) Worldwide Quarterly Mobile Phone Tracker shows that the global smartphone market is expected to grow 1.5% year on year in 2020, with shipments of 1.4 billion. The IDC expects 190 million 5G smartphones to be delivered next year, accounting for 14% of all smartphones shipped. This is much more than the first year of 4G smartphones when they made up 1.3% of all smartphones delivered in 2010.
“Recent developments in the Chinese market, together with anticipating aggressive activities in the supply chain of smartphones and OEMs, have led to an increase in our short-term 5G forecast,” said Ryan Reith, vice president of the program at IDCs. Worldwide Mobile Device Trackers, in a press release. “There is little doubt that China will soon become the leading market in terms of 5G volume, but other major markets such as the US, Korea, the UK, and Canada are all expected to help increase the volume of 2020. The real story here is about prices, including hardware and service. We are confident that the prices of 5G smartphones will fall quickly to grow this market segment. ”
The sale of smartphones has fallen three years in a row, so there is nothing else to do but the introduction of 5G. This aligns with what Gartner reported today, with analysts predicting 5G sales in China and boosting sales in the first quarter of 2020.
According to the report, “Android vendors are expected to lower the cost of 5G smartphones, starting with an abundance of first quarterly announcements at both CES and MWC. Apple’s entry into the 5G smartphone market is highly anticipated for an announcement in September 2020 focusing on price and market availability. ”
“Apart from the expected rapid 5G growth in China, we should not miss 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. So far, in the second half of 2019, shipments are much lower than expected, and price points are not quite at the premium. Accelerated acceptance of 5G worldwide will depend heavily on factors such as the arrival of 5G networks, operator support, as well as substantial price cuts to offer more affordable 5G devices, “Sangeetika said Srivastava, senior research analyst at IDC’s global mobile device trackers, in the report.
Important factors:
Android:
The smartphone share of Android will increase to 86.6% in 2019 from 85.1% in 2018, mainly due to 5G launches and extensive product portfolios of global Chinese players. Volumes are expected to grow with 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, an increase from US $ 255 in 2018, with a push of the new devices available in 2H19.
iOS:
2019 remains a challenging year for iPhone shipments, with volumes expected to fall to 185 million, a fall of 11.4% year on year, mainly due to stressed market headwinds and a lack of 5G devices. However, Apple will likely deliver 5G handsets later in 2020, which will slightly increase iOS volumes. It will have an advantage over other suppliers with a better 5G understanding to launch iOS 5G devices.
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