The market for smartphones is expected to rise substantially in 2021, reaching 1.37 billion units, or about 7.4% growth, according to new research from International Data Corp (IDC).
The market will then be followed by growth of 3.4% in 2022 and 2023, respectively.
The updated growth in smartphone shipments follows IDC’s original forecast for growth of 5.5% earlier this year. The increased growth comes from the rise in iOS device shipments as well as Android shipments at 13.8% and 6.2%, respectively, for the year.
The growth in smartphones comes after years of slow or declining growth in the market. In 2020, the COVID-19 pandemic drastically impacted shipments of smartphones but as prices have come down and more 5G knowledge has been spread, shipments are growing again.
"The smartphone market was better prepared from a supply chain perspective heading into 2020 given almost all regions were expecting to grow and vendors were preparing accordingly," said Ryan Reith, group vice president with IDC's Mobility and Consumer Device Trackers. "2020 was a bust due to the pandemic but all of the top brands continued forward with their production plans with the main difference that the timeline was pushed out. Therefore, we are at a point where inventory levels are much healthier than PCs and some other adjacent markets and we are seeing the resilience of consumer demand in recent quarterly results."
5G leads the way
5G technology will continue to be the primary driver for growth in 2021 as both vendors and channels focus on 5G devices that carry a significantly higher average selling price (ASP) than older 4G devices.
5G smartphones will reach $634 in 2021, which is flat from $632 in 2020. However, 4G devices will witness a massive price decline as ASPs drop to $206, a 30% decline from last year, IDC said.
Because of this, 5G shipment volume will grow to 570 million units, up 123.4% from last year. China will lead the market with 47.1% of the 5G global market share, followed by the U.S. at 16% and Japan at 4.1%.
By the end of 2022, 5G units will make up more than half of all smartphone shipments with a 54.1% share, IDC forecasts.
"Despite the ongoing issues surrounding the pandemic and the Delta variant, consumers are continuing to upgrade to more premium smartphones this year," said Anthony Scarsella, research director for mobile phones at IDC. "Premium smartphones (priced at $1,000+) continued to grow in the second quarter as the segment displayed 116% growth from last year. Moreover, ASPs across the entire market climbed 9% as buyer preferences trend towards more costly 5G models than entry-level devices."
The complete research can be found in IDC’s Worldwide Quarterly Mobile Phone Tracker.