China’s 5G surge will pull smartphone market up in 2020

Dec. 11, 2019
International Data Corporation says that after three straight years of contraction, 2020 will be a year of growth for global smartphone shipments, fueled by China’s ambitious 5G plans.
In International Data Corporation’s (IDC) most recent Worldwide Quarterly Mobile Phone Tracker, the market-intelligence firm says that following three straight years of market contraction, global smartphone shipments should return to growth in 2020—fueled by ambitious 5G plans in China. IDC expects the market to grow 1.5% year over year in 2020, with shipment volumes just over 1.4 billion. IDC expects 190 million 5G smartphones to ship next year, accounting for 14% of total smartphones shipped. That anticipated number far exceeds the first year of 4G shipments, which were 1.3% in 2010, IDC noted. “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,” explained Ryan Reith, program vice president with IDC’s worldwide mobile device trackers. “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.”

“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,” said Sangeetika Srivastava, senior research analyst with IDC’s worldwide mobile device trackers. “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.”

Following three straight years of declining smartphone volumes, there leaves little room for 5G to raise smartphone average selling prices, IDC pointed out. Additionally, the nearly ubiquitous 4G LTE worldwide generally provides users with satisfactory data speeds. IDC expects Android vendors to drive down the cost of 5G smartphones, starting with an abundance of first-quarter announcements. Apple’s entrance into the 5G smartphone market is highly anticipated for a September 2020 announcement, IDC added, with the real focus around pricing and market availability.

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