Global smartphone shipments are forecasted to grow 2.4% year-over-year between October and December, followed by 4.4% year-over-year growth in 2021, according to projections from the market intelligence firm International Data Corporation (IDC). In fact, the company estimated that the global smartphone market will grow each year through 2024 with a five-year compound annual growth rate (CAGR) of 1.3%.
This growth will be fuelled by a recovery in the supply chain of smartphone makers, which was severely affected owing to the COVID-19 pandemic. New 5G products will also play a key role in the growth, IDC estimated. In fact, IDC predicted that 5G smartphone shipments will reach close to 10% of global volumes in 2020 and grow to 29% in 2024. If this were to happen, it will be a significant shift, given that most countries in the world do not yet have fully fleshed out 5G networks.
“Despite concerns around weakness in 5G demand, smartphone volumes exceeded the forecast in 3Q20 and supply-side momentum headed into the holiday quarter and 2021 remains strong,” said Ryan Reith, program vice president with IDC’s worldwide mobile device trackers.
“We’ve come to the conclusion that despite on-going lockdowns and economic concerns, consumers in many markets around the world have shifted their normal spending from things like travel, dining out, and general leisure to things like consumer electronics. Smartphones happen to be a benefactor of this transition,” Reith added.
IDC also said that bringing hardware costs of making 5G phones on par with 4G phones will be crucial. To that end, the firm estimated that the average selling price of 5G phones will drop 25% year over year in 2020 to $611, and then to $453 in 2024.
“Competitive pricing will play an integral role in shaping 5G development. The COVID-19 crisis has influenced consumer behavior by tilting it toward more budget-friendly devices and narrowing the spend for essentials only. Aggressive promotions and more affordable 5G devices from major smartphone vendors are expected to partially offset the impact in the near term,” said Sangeetika Srivastava, senior analyst with IDC’s worldwide mobile device trackers.