The worldwide smartphone market is expected to decline 9.5 per cent year over year in 2020 with shipments totaling 1.2 billion units, according to a recent International Data Corporation (IDC) report. The smartphone market, however, is expected to return to a full recovery by 2022 on the back of strong 5G push.
"On a positive note, IDC expects the smartphone market will return to a full recovery by 2022, and will achieve a compound annual growth rate (CAGR) of 1.7 per cent over the five year forecast, largely driven by the assumption that smartphones will continue to be the computing platform of choice for most of the world," it said.
As per IDC report, 5G smartphones are expected to capture 50 per cent of the global market by 2023. It expects global 5G smartphone average selling prices (ASPs) to hit $495 by 2023, which would eliminate most of the price concerns voiced by consumers in recent surveys, it said.
Currently, the consumer demand for 5G smartphone is very low due to higher price and economic headwinds faced by the market in wake of the coronavirus-led lockdown. As per the report, the supply-driven 5G push coupled with a poor economic climate will lead the drop in selling price in 2020 and beyond, which would boost demand for the 5G smartphone.
"5G remains a priority for all smartphone original equipment manufacturers (OEMs) despite the challenges with the COVID-19 pandemic and lack of consumer demand," said Ryan Reith, program vice president with IDC's Worldwide Mobile Device Trackers.
"We still believe that consumer demand for 5G is very low and when that is combined with the economic headwinds facing the market, the pressure to drive down hardware and service fees associated with 5G will become increasingly important," Reith added.
The report noted that prior to the pandemic there was an expectation that total smartphone sales would return to growth in 2020, which is unlikely to happen. "Although we expect year-over-year growth of 9 per cent in 2021, that is only due to the large drop in 2020. The real recovery won't happen until 2022 when smartphone volumes return to pre-COVID levels," said Nabila Popal, research director with IDC's Worldwide Mobile Device Trackers.
"Other elements beyond 5G will play a role in the market recovery, most notably the continued opportunity in developing markets. There continues to be a strong shift towards low- to mid-end 4G devices in developing regions, which make up over 80 per cent of smartphone volumes in these regions," Popal added.
By Chitranjan Kumar