Mobile Devices

Smartphone shipments to grow 5.5% in 2021

11 March 2021
The biggest regions for smartphone growth will be China and U.S. as a result of increased 5G adoption. Source: IDC

Smartphone shipments are forecast to grow 13.9% year-over-year in the first quarter of 2021 and grow 5.5% for the full year, according to new research from International Data Corp (IDC).

This growth will be driven by recovery in demand and a supply-side push of 5G devices. IDC said it forecasts the smartphone market to deliver a compound annual growth rate of 3.6% through 2025.

"Despite ongoing lockdowns and economic concerns, IDC continues to see strong demand for smartphones,” said Nabila Popal, research director at IDC. “We are also seeing that everyone in the value chain — from supply chains, OEMs, and channels to consumers — is better prepared to handle any further lockdowns. IDC has seen accelerated growth in online channels, climbing to 27% share in 2020 from just 20% the prior year, as channels adapt to the pandemic lifestyle."

The two largest geographic market will be China and the U.S. with grow by 5.0% and 3.5% in 2021, respectively. Despite several city-level lockdowns in January, the outlook for China is stable due to strong consumer confidence. Both markets in 2020 saw a 10% to 11% decline, but 5G development and recently launched 5G iPhones are expected to boost shipments in 2021.

IDC said that 5G will remain the driving factor in the smartphone market with shipments of 5G phones to account for more than 40% of global volume in 2021 and grow to 69% in 2025. This will also help increase the overall average selling price (ASP) for smartphones to $363 in 2021, up from $349 in IDC’s previous forecast. Price pressure from competition and the desire to sell more phones in the market will drive 5G ASPs down, with IDC forecasting to drop to $404 by the end of the forecast period in 2025.

"The strong performance in the last quarter of 2020 has led to a huge push from all OEMs to increase production,” said Sangeetika Srivastava, senior analyst with IDC's Worldwide Mobile Device Trackers. “Although this may create some temporary challenges in production, we do not foresee any significant gap as the manufacturers successfully cope with the ramp up. On the other hand, this is likely to intensify the pressure on smaller vendors as larger vendors are given priority by ODMs, making it harder for them to obtain targeted volumes."

The full research can be found in IDC’s Worldwide Quarterly Mobile Phone Tracker.

To contact the author of this article, email PBrown@globalspec.com


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