The growth of global smartphone shipments is expected to reach a record high level in the last six years.
Smartphones have become an integral part of our lives. We all use it for making calls, video calls, playing games, making payment, booking rides, etc. In the last five years, the smartphone OEMs such as Xiaomi, Oppo, Vivo, etc. have come into the picture and launched more budget-friendly devices. However, despite the strong demand for mid-range and low-end 4G phones in emerging markets such as India, China, Europe, the OEMs are seeing minimal or no growth in their smartphone shipments globally.
Surprisingly, 2015 was the last time when the worldwide smartphone market saw double-digit growth in devices shipments. In fact, the market has been failing to register any growth since 2017. However, this trend is expected to change in 2021.
According to IDC, the global shipments of smartphones is estimated to reach 1.38 billion units in 2021, clocking 7.7% YoY growth. This would be a major market turnaround as 2020 saw a 5.9% YoY decline in smartphone shipments.
Interestingly, 5G smartphones would emerge as the growth driver this year.
Due to the Covid-19 lockdown, consumers are now spending more time on their smartphones and tablets than ever. The consumption of data is all-time high as many industries have moved themselves to the internet to cope with lockdown and other Covid-19 related challenges. As a result, the demand for high speed 5G connectivity has become more vocal.
Sensing this great opportunity, telecom companies are now leaving no stone unturned to expedite the rollout plans of their 5G network. On the other hand, Apple, Samsung, Huawei and all other major smartphone OEMs are betting big on 5G, by launching flagship 5G devices such as iPhone 12 Pro Max, Galaxy S21 Ultra 5G, Huawei Mate 40 Pro, etc. These 5G premium devices also helped companies generate more revenue in Q1 2021.
Global Smartphone Shipments 2021: 5G Growth Driver
Interestingly, the 5G smartphone shipments are also expected to increase a mind-blogging 130% in 2021. Almost all major markets, except China, will see triple-digit growth in 5G shipments by the end of this year. However, China is expected to lead in terms of market share as it will account for nearly 50% of the total 5G shipments in 2021, followed by the US with a 16% share. Other major markets such as Western Europe and Asia-Pacific (excluding China and Japan) will together account for a 23.1% share of the worldwide 5G market.
Another reason behind the increasing demand for 5G smartphones could be the “price drop”. This year, the average selling price (ASP) for 5G Android devices is expected to drop 12% YoY, to $456 and then below $400 in 2022. The drop is expected to continue in the following years as well due to the rising competition which will end up flooding the market with 5G smartphones.
IDC expects low single-digit growth in smartphone shipments to continue through 2025 with a five-year CAGR of 3.7%.
The unprecedented adoption of high-speed internet and scenario created due to Covid19 are the main reason behind the accelerated growth of worldwide smartphone shipments in 2021. It’s the dawn of 5G era and it wouldn’t be an over statement to quote that 2022 belongs to 5G.