Saturday, 2nd December 2023

2021 smartphone growth to reach highest level since 2015

Following a back-to-back quarterly growth, the International Data Corporation (IDC) has raised its near-term outlook for the global smartphone market.

[FILES] Different brand of phone display at Computer village.

Following a back-to-back quarterly growth, the International Data Corporation (IDC) has raised its near-term outlook for the global smartphone market.

IDC Worldwide Quarterly Mobile Phone Tracker revealed that shipments of smartphones are forecast to reach 1.38 billion units in 2021, an increase of 7.7 per cent over 2020. This trend is expected to continue into 2022 when year-over-year growth will be 3.8 per cent with shipments totalling 1.43 billion.

According to IDC, which is the market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets, said markets worldwide continue to migrate toward 5G, where networks are deployed.

Within emerging markets, there is strong demand for mid-range and low-end 4G phones following last year’s pandemic slowdown. Looking towards the later years in the forecast, IDC expects low single-digit growth to continue through 2025 with a five-year compound annual growth rate (CAGR) of 3.7 per cent.

It stated the global semiconductor shortage remains a concern for many industries and the smartphone market has not been excluded from this. However, the impact has been far less than in other markets like automotive, PC, and various consumer tech categories.

Program Vice President with IDC’s Worldwide Mobile Device Trackers, Ryan Reith, said: “Smartphones are seeing competition for consumer spending from adjacent markets like PCs, tablets, TVs, and smart home devices, yet that hasn’t slowed the market’s path to recovery.

“The smartphone market returned to growth during the holiday quarter last year and since then we’ve only seen production from top suppliers ramp up. There continues to be a strong supply-side push towards 5G, and price points continue to drop as a result. IDC expects average selling prices (ASPs) for 5G Android devices to drop 12 per cent year over year in 2021 to $456 and then below $400 in 2022. Apple will continue to feel price pressure.”

IDC observed that with 5G shipments expected to grow nearly 130 per cent in 2021, almost all regions outside of China will see triple-digit growth by the end of this year. However, in terms of market share, China will lead the way with nearly 50 per cent share of 5G shipments in 2021 while the US will follow with a 16 per cent share. Other significant markets such as Western Europe and Asia/Pacific (excluding China and Japan) will combine for a 23.1 per cent share of the worldwide 5G market by the end of 2021.

Research Manager with IDC’s Worldwide Mobile Device Tracker, Anthony Scarsella, said:
“Although the 7.7 per cent growth will feel like an impressive market turnaround, we must keep in mind that we are rebounding from one of the most challenging years on record.

“2021 will represent the largest year-over-year growth the market has witnessed since 2015, as the shift towards 5G across all price tiers continues to accelerate. The 5G shift will also deliver peak smartphone ASPs in 2021 ($376, up 9.7 per cent year over year) when compared to the remainder of the forecast period as costly 5G devices continue to replace LTE devices, which are also starting to drop in price, down 27 per cent in 2021.”