While the smartphone market will continue to struggle to gain ground for the second half of 2019, the market is expected to push back into shipment growth territory in 2020 on the back of strong 5G sales, according to a new report from International Data Corp (IDC).
IDC forecasts that smartphone shipments for the second half of 2019 will be nearly flat at -0.4%, but the yearly decline will be 2.2% year-over-year, making it the third straight year of global contraction.
IDC said the reason for sluggish sales of smartphones is due to consumers holding their devices for longer and global uncertainties in supply chains due to the ongoing U.S. and China trade war.
The good news is that 5G smartphones and networks have arrived and commercial deployments are happening at a rapid pace. In 2020, IDC expects 5G to ramp up even further with 5G shipments reaching 8.9% of total unit shipments of smartphones, or about 123.5 million devices. This is expected to grow to 28.1% of the worldwide smartphone shipments by 2023, IDC 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," said Ryan Reith, program vice president with IDC's Worldwide Mobile Device Trackers. "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.”
Reith said the 5G ramp up on smartphones will be more subtle than what the market saw with 4G. But the difference will be the penetration of the technology, which will increase specifically in China, the U.S. and Western Europe. IDC expects a wider range of sub-6 GHz 5G smartphones with mid-range prices to enter the market in early 2020, if not sooner.
This introduction of mid-range 5G smartphones is important considering early phones have resulted in sticker shock among some consumers. But that is more than likely because the technology is in its infancy and there are only a handful of smartphones that support 5G from the various carriers worldwide.
