IDC Forecasts Smartphone Holiday Sales Growth & Future Growth Due To 5G

The press release was submitted to SOURCE media through its business wire service.

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FRAMINGHAM – Following a stronger than expected third quarter (3Q20), the global smartphone market is expected to return to growth during the holiday quarter this year.

According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, smartphone shipments are forecast to grow 2.4% year over year in 4Q20, followed by 4.4% year-over-year growth in 2021. The market rebound will be fueled by an impressively quick supply chain recovery as well as significant incentives from both OEMs and channels on new 5G products.

IDC expects the global market to grow each year through 2024 with a five-year compound annual growth rate (CAGR) of 1.3%.

“Despite concerns around weakness in 5G demand, smartphone volumes exceeded the forecast in 3Q20 and supply-side momentum headed into the holiday quarter and 2021 remains strong,” said Ryan Reith, program vice president with IDC’s Worldwide Mobile Device Trackers. “We’ve come to the conclusion that despite on-going lockdowns and economic concerns, consumers in many markets around the world have shifted their normal spending from things like travel, dining out, and general leisure to things like consumer electronics. Smartphones happen to be a benefactor of this transition.”

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Looking at the regional markets, the recovery in China has been slower than anticipated largely due to weaker than expected demand for 5G. All the major brands in China have shifted the majority of their smartphone portfolios over to 5G leaving consumers with fewer options than prior years. As a result, IDC expects average selling prices (ASPs) in China to grow 11.4% year over year in 2020.

Rising ASPs mixed with weaker than expected demand will create some market challenges and shipments in the region are forecast to be down 11.4% in 2020. The other developed markets, including North America, Western Europe, and Japan, are all expected to see year-over-year growth in the holiday quarter driven by strong seasonal promotions and lucrative shopping days like Cyber Monday.

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From a technology standpoint, 5G is the driving force for the industry right now. IDC expects 5G smartphone shipments to reach close to 10% of global volume in 2020 and grow to 29% in 2024. Despite concerns about the lack of demand for 5G, it is apparent that the wheels are in motion to transition the mobile industry to the latest network technology. A key factor to accomplish this will be getting the cost of 5G hardware close to or on par with 4G phones. This is something the industry is focusing on and IDC expects worldwide 5G ASPs to drop 25% year over year in 2020 to $611 and then to $453 in 2024.

“Competitive pricing will play an integral role in shaping 5G development. The COVID-19 crisis has influenced consumer behavior by tilting it toward more budget-friendly devices and narrowing the spend for essentials only. Aggressive promotions and more affordable 5G devices from major smartphone vendors are expected to partially offset the impact in the near term,” said Sangeetika Srivastava, senior analyst with IDC’s Worldwide Mobile Device Trackers.

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC’s Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly Excel deliverables and on-line query tools.

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International Data Corporation (IDC) is a global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC’s analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world’s leading tech media, data and marketing services company. TRhe comoany has its headquarters in Framingham, but is planning a move to Needham in 2021.