International Data Corporation or IDC for short has released a new report on the global smartphone market. According to the research firm, the market will only recover in the year 2022. And by 2023, 5G handsets will account for 50% of the entire market.
Smartphones have become a necessity in today’s fast-paced world. However, the worldwide smartphone market has been diminishing for a few years now. It was forecasted to improve by the end of 2020. But that did not happen as a result of COVID-19 pandemic, which further accelerated the rate of decline.
Currently, IDC forecasts the global smartphone market to decline 9.5% YoY in 2020 with 1.2 billion units in shipments. This is despite better than expected performance in Q2 since the market was still down 17% YoY.
According to Ryan Reith of IDC, 5G handsets will drive the growth in the coming years as it continues to be the priority of OEMs. Due to pandemic, companies have reduced their production plans. Mostly, they cut costs on 4G devices as they expect developed markets to be dominated by 5G smartphones leaving less space for the former by the end of 2020.
Most importantly, with the economic crisis, the average selling price (ASP) of 5G devices will continue to drop in 2020 and beyond. Even in the last quarter, 43% of 5G handsets sold in China were already priced under $400. IDC expects the global 5G smartphone ASPs to hit $495 by 2023, which in turn will increase the market share of 5G handsets to 50%.
Nabila Popal of IDC says that the worldwide smartphone market will grow 9% YoY in 2021 but that will be due to the huge drop in 2020. As per her, the real recovery won’t happen until 2020 and low to mid-end 4G devices, which account for 80% shipments in developing markets will play an important role.
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