The latest IDC report released in December 2021 forecast the average selling price (ASP) of 4G smartphone vs 5G smartphone.
5G devices are expected to deliver growth of 117 percent in 2021 driven by a supply-side push from both vendors and channels. The shift to 5G translates to greater revenues for most vendors compared to more affordable 4G devices, which saw 22.5 percent decline in shipments.
5G-powered smartphones are expected to have a $643 ASP in 2021, which is 1.7 percent higher than 2020, thanks to the success of iPhone 12 and 13 devices. 5G is now forecast to be almost 60 percent of worldwide shipments by this time next year, slowing the decline in smartphone ASPs over the forecast period.
IDC expects the 5G ASP to drop to $416 by the end of the forecast period. The ASP for 4G devices is expected to reach $204 in 2021, down 26.5 percent compared to 2020, and fall to $109 by the end of the forecast period.
China is forecast to be the largest market for 5G smartphones in 2021 with 46.9 percent of shipments, followed by the United States at 16.1 percent and APeJC at 12.8 percent. However, China’s share is expected to drop to 30.5 percent by 2025 as other regions ramp up their 5G networks and connectivity.
Shipment of smartphones
Shipments of smartphones will grow 5.3 percent in 2021 to 1.35 billion.
IDC has lowered its growth forecast for 2021 and 2022 from 7.4 percent and 3.4 percent to 5.3 percent and 3.0 percent respectively. Looking at 2023 and beyond, IDC expects 3.5 percent five-year CAGR fueled by pent-up demand, declining average sale prices (ASPs), and transition from feature phones to smartphones.
There was a shortage of 4G components, which will impact vendors with a higher portfolio mix of 4G devices than vendors with a higher proportion of 5G models. “These challenges surrounding 4G components have shifted our short-term forecast for Android more than iOS, which is now primarily 5G,” said Nabila Popal, research director with IDC’s Mobility and Consumer Device Trackers.
2021 will represent peak average selling prices as Android will end the year at $265 while iOS climbs to a staggering $950.
The demand for premium models in developed markets has 2021 ASPs growing 11.4 percent to $382, up from $343 one year ago. The record-breaking $950 ASP for iOS in 2021 has Apple controlling nearly 43 percent of all smartphone revenues despite only 17.1 percent market share.
“Prices in the overall market will slowly fall as 5G devices will decline 14.5 percent in 2022 while 4G devices drop more than 18 percent next year as the market continues to shift towards 5G,” said Anthony Scarsella, research director with IDC’s Worldwide Mobile Device Trackers.