The latest IDC report has revealed the 5G smartphone price trends in the coming years.

5G remains a priority for all smartphone OEMs despite the challenges with the Covid-19 pandemic and lack of consumer demand.

Many of the top vendors have reduced their 2020 production plans to align with the market decline. Smartphone makers are cutting their 4G portfolios.

There is a strong shift towards low- to mid-end 4G devices in developing regions, which make up over 80 percent of smartphone volumes in these regions.

“Most channels in developed markets have set the expectation that the portfolios they carry will be dominated by 5G units by the end of 2020 leaving less shelf space for 4G,” said Ryan Reith, program vice president with IDC’s Worldwide Mobile Device Trackers.

This supply-driven 5G push mixed with a poor economic climate will accelerate the drop in 5G average selling prices (ASPs) in 2020 and beyond, IDC said.

In the past quarter, China saw 43 percent of 5G devices priced under $400. 5G smartphone ASPs will hit $495 by 2023, which should eliminate most of the price concerns voiced by consumers in recent IDC surveys. IDC expects 5G smartphones to capture 50 percent of the global market by 2023.

The smartphone market is forecast to decline 9.5 percent in 2020 to 1.2 billion units, IDC said.

Growth in smartphone market will be 9 percent in 2021. IDC expects the smartphone market will return to a full recovery by 2022, and will achieve a compound annual growth rate (CAGR) of 1.7 percent over the five year forecast.

“Though we expect year-over-year growth of 9 percent in 2021, that is only due to the large drop in 2020. The real recovery won’t happen until 2022 when smartphone volumes return to pre-COVID levels,” said Nabila Popal, research director with IDC’s Worldwide Mobile Device Trackers.