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China's Surge Into 5G Will Push the Worldwide Smartphone Market Back to Growth in 2020, Says IDC

Published: Nov 27,2019

Following three straight years of market contraction, global smartphone shipments are expected to return to growth in 2020 fueled by ambitious 5G plans in China. According to the latest forecast from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, the worldwide smartphone market is expected to grow 1.5% year over year in 2020 with shipments volumes just over 1.4 billion. IDC expects 190 million 5G smartphones to ship in 2020, accounting for 14% of total smartphones shipped, which far exceeds the first year of 4G shipments (2010) at 1.3%.

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"Recent developments in the China market along with anticipation of aggressive activity from the smartphone supply chain and OEMs have caused us to raise our short-term 5G forecast," said Ryan Reith, program vice president with IDC's Worldwide Mobile Device Trackers. "There is little doubt that China will quickly become the lead market in terms of 5G volume, but other important markets like the U.S., Korea, United Kingdom, and Canada are all expected to help drive 2020 volume. The real story here is around pricing, which includes both hardware and service. We are very confident that 5G smartphone prices will come down quickly in order for this market segment to grow."

Following three straight years of declining smartphone volumes there leaves little room for 5G to raise smartphone ASPs. Additionally, the nearly ubiquitous 4G LTE around the world generally provides users with satisfactory data speeds. Android vendors are expected to drive down the cost of 5G smartphones starting with an abundance of first quarter announcements at both CES and MWC. Apple's entrance into the 5G smartphone market is highly anticipated for a September 2020 announcement with the real focus around pricing and market availability.

"Apart from the expected rapid 5G growth in China, we also can't miss watching other markets such as Australia, Japan, and Korea in Asia/Pacific as well as some European countries that have picked up 5G slower than predicted. Shipments so far in the second half of 2019 have come in much lower than expected and price points are not quite at the premium. Accelerated 5G adoption globally will depend a lot on factors like the arrival of 5G networks, operator support, as well as substantial price reductions to offer more affordable 5G devices," said Sangeetika Srivastava, senior research analyst with IDC's Worldwide Mobile Device Trackers.

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