The shipment of smartphone will grow 12 percent in 2021 to 1.4 billion units, according to Canalys.
Smartphone shipment fell 7 percent in 2020 due to major market constraints caused by the COVID-19 pandemic.
Component supply bottlenecks will limit the growth potential of smartphone shipments this year.
The industry is fighting for semiconductors, and every brand will feel the pinch,” Canalys Research Manager Ben Stanton said.
In recent months, vendors redirected some allocation to other regions due to the COVID-19 outbreak in India. Vendors will first turn to regional prioritization, focusing the flow of units into lucrative developed markets such as China, the US and Western Europe at the expense of Latin America and Africa.
“The other angle to this is pricing,” said Canalys VP of Mobility Nicole Peng. “As key components, such as chipsets and memory, increase in price, smartphone vendors must decide whether to absorb that cost or pass it on to consumers.”
There are major constraints around LTE chipsets, this will cause challenges at the low end, where customers are particularly price sensitive.
There is strong momentum behind 5G handsets, which accounted for 37 percent of global shipments in Q1, and are expected to account for 43 percent for the full year with 610 million units. This will be driven by intense price competition between vendors, with many sacrificing other features, such as display or power, to accommodate 5G in the cheapest device possible.
By the end of the year, 32 percent of all 5G devices shipped will have cost less than US$300.
The Canalys report today said 5G smartphone shipment will be overtaking 4G smartphone shipment in 2022.
Research firm Omdia earlier said the world added 385.5 million 5G subscribers between Q4 2019 and Q4 2020 to reach 401 million 5G connections globally. The number of 5G users connections is expected to reach 619 million globally by the end of 2021.
Telecom industry association 5G Americas said an additional 105 5G networks went live globally in 2020, bringing the total up to 163 5G networks globally. The number of commercial 5G networks is expected to reach 277 by the end of 2021, according to data from TeleGeography.