The latest IDC report indicates that demand for 5G smartphones will gain momentum in 2020 when more mobile operators start rolling out 5G services.
5G smartphone shipment is expected to reach 123.5 million units, accounting for 8.9 percent of smartphones shipped in 2020. Shipment of 5G smartphone is forecast to reach 28.1 percent of worldwide smartphone shipments by 2023.
Phone makers will be launching a range of sub-6GHz 5G smartphones with midrange prices in early 2020. Qualcomm last week announced it has tied up with 12 phone makers to help bringing out mid-range 5G smartphones next year.
“We expect the 5G ramp on smartphones to be more subtle than what we saw with 4G, but that is primarily because we are in a much different market today. The biggest change in our 5G forecast assumptions is that we have lowered average selling prices (ASPs), particularly in China,” said Ryan Reith, program vice president with IDC’s Worldwide Mobile Device Trackers.
There is a potential risk for telecom operators as premium customers who buy 5G devices are most likely to switch mobile provider when they buy a new device, according to the latest research from Strategy Analytics.
Susan Welsh de Grimaldo, director at Strategy Analytics, said: “5G represents an opportunity for 5G operators to disrupt normal churn patterns with the most valuable customers who spend most on devices and on service indicating a willingness to switch mobile operator when they buy their next smartphone.”
IDC said the number of smartphone shipment volumes will be nearly flat (-0.4 percent) in the second half of 2019. Smartphone market will decline 2.2 percent in the full year, making 2019 the third straight year of global contraction. IDC expects smartphone shipment growth to reach 1.6 percent in 2020.
The global smartphone market and relevant supply chains remain uncertain, largely due to fluctuations in U.S-China trade negotiations, making future planning even more challenging than normal, said Sangeetika Srivastava, senior research analyst with IDC’s Worldwide Mobile Device Trackers.
Android’s smartphone share will increase to 87 percent in 2019 from 85.1 percent in 2018 mostly due to 5G launches and expedited inventory cleanup of older devices. Android ASPs are estimated to grow by 3.2 percent in 2019 to $263 from $254 in 2018.
iPhone shipments will drop to 177.9 million, down 14.8 percent year over year, mostly due to market maturity as well as a lack of 5G devices.
Apple is likely to deliver 5G iPhones later in 2020, which will pick up iOS volumes slightly as it will have an edge over other phone vendors with a better understanding of 5G market conditions for a much more planned launch.