The below chart from research firm IDC indicates the demand for 5G smartphones in 2019, 2020 and 2021 as compared with 3G and 4G smartphones.

5G smartphones

IDC predicts the first commercially ready 5G smartphones will appear in the second half of 2019 with a ramp up across most regions happening in 2020. The IDC report did not reveal specific forecast for India, US, China, among other markets.

IDC projects 5G smartphone volumes to account for roughly 7 percent of all smartphones in 2020 or 212 million in total. The share of 5G devices should grow to 18 percent of total volumes by 2022.

The IDC analysis indicates that 5G will be going through a slow start as far as retail users are concerned. At present, most telecom operators are looking for 5G launches targeting the large enterprise market.

Ooredoo, a leading telecom operator in Kuwait, and Telecom Italia launched their limited 5G services without any voice call services or supporting smartphones. Both mobile operators are targeting business customers in their respective telecom markets.

The forecast on 5G smartphone market does not offer any good news to chipset makers such as Qualcomm and Intel.

Ken Hyers, director, Emerging Device Technologies at Strategy Analytics, said: “We expect early 5G smartphones in 2019 and 2020 to be very expensive, approaching $1000, due to their high technical complexity and normal early mover premiums.”

Telecom equipment company Ericsson earlier said that the commercial 5G networks are expected to be in service in 2018 and deployments on a large scale will start 2020. There will be one billion 5G subscriptions by end of 2023 according to Ericsson’s forecasts.

Smartphone market to drop

The global smartphone market is expected to dip 0.2 percent in 2018 after declining 0.3 percent in 2017, according to IDC.

IDC said smartphone shipments are forecast to drop 0.2 percent in 2018 to 1.462 billion units from 1.465 billion in 2017 and 1.469 billion in 2016.

IDC expects smartphone the market will grow roughly 3 percent annually from 2019 onwards with worldwide shipment volume reaching 1.654 billion in 2022 and a five year compound annual growth rate (CAGR) of 2.5 percent.

IDC forecasts smartphone consumption in China will decline 7.1 percent before flattening out in 2019. China’s smartphone market dropped 4.9 percent year over year in 2017.

Smartphone market in India will grow at 14 percent in 2018 and 16 percent in 2019.

China-based OEMs such as Xiaomi, Vivo, OPPO, among others, will continue their strategy of selling large volumes of low-end devices by shifting their focus from China to India. Most of the China-based smartphone companies have managed the India import tariffs by doing final device assembly at local India manufacturing plants.

“India is grabbing headlines and the market itself is going through some rapid transformation. Local India manufacturing continues to ramp up, despite still having a heavy dependence on China for components. The boom in India is likely to continue in the years to come,” Ryan Reith, program vice president with IDC’s Worldwide Quarterly Mobile Device Trackers, said.

Outside of Asia/Pacific, the biggest regions for growth will be the Middle East, Africa, and Latin America.

ASP to grow

The average selling price (ASP) of a smartphone will grow at 10.3 percent to $345 from the $313 ASP in 2017.

The average selling price for a smartphone will be $362 in 2022, resulting in a 5-year CAGR of 2.9 percent.

Baburajan K