Yesterday, IDC released the latest forecast report on the smartphone market. In it, IDC expects that 5G smartphone shipments in 2020 will account for 8.9% of total smartphone shipments. This indicator will reach 123.5 million units. By 2023, this proportion is expected to grow to 28.1%.
The report also shows that in the second half of 2019, the smartphone market showed signs of recovery. By 2020, the smartphone market will resume growth.
IDC expects smartphone shipments progress will be flat (-0.4%) in the second half of 2019. As you know, in the first two quarters of this year, it had a decline of 2.3% and 6.6%. However, in the full year of 2019, it will fall 2.2% year-on-year to around 1.371 billion units. In 2020, smartphone shipments will increase slightly by 1.6%.
Sangeetika Srivastava, senior research analyst at IDC’s Global Mobile Device Tracking Program, said: ‘The global smartphone market and relevant supply chains remain uncertain, largely due to fluctuations in U.S-China trade negotiations, making future planning even more challenging than normal. Consumers continue to hold their devices for lengthier times making sales difficult for the vendors and channels alike. However, expectations of aggressive promotions and offers in the second half of 2019 aimed at helping to clear out any channel inventory and get consumers excited about the next wave of smartphone technology should steer the market back toward renewed growth.’
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Another forecast report released by Strategy Analytics last month showed that in the US, the cycle of consumer replacement is currently 33 months.
Although the global economic uncertainty and continuous trade variables affected this market, 5G brings a glimmer of hope. Many regions have begun commercial deployment of 5G networks. Although 2019 is only an entry year, 2020 seems to be the year when 5G began to accelerate.
What’s Happening In The 5G Smartphone Market?
Ryan Reith, vice president of IDC’s global mobile device tracking program, said: ‘The anticipation of 5G, beginning with smartphones, has been building for quite some time but the challenges within the smartphone market over the past three years have magnified that anticipation. To be clear, we don’t think 5G will be the savior in smartphones. But we do see it as a critical evolution in mobile technology. We expect the 5G ramp on smartphones to be more subtle than what we saw with 4G. But that is primarily because we are in a much different market today. The biggest difference is the level of penetration we are at now compared to 2010/2011, specifically in China, the US, and western Europe. The biggest change in our 5G forecast assumptions is that we have lowered average selling prices (ASPs), particularly in China. We also expect a wide range of sub-6GHz 5G smartphones with midrange prices to enter the market in early 2020, if not sooner.’
