5G Is Saving the Smartphone Industry

It’s not exactly a rebound, but growth in emerging markets has provided the smartphone industry a glimmer of hope for the post-COVID world, with 5G phone shipments expected to give 2021 numbers a boost, according to research firm IDC.

“Although COVID-19 drastically impacted 2020 shipments,” the research firm says, “2021 shipments have managed to display minimal growth compared to 2019 (pre-pandemic) volumes, giving us a more accurate view of the state of the market.” (Or at least a theoretical version of the smartphone market not influenced by external factors like a global pandemic.)

Markets like India, Japan, the Middle East, and Africa are fueling the recovery, IDC says. China, the US, and Western Europe will still be down in 2021 compared to 2019

Still, global annual smartphone shipments are expected to reach 1.37 billion units in 2021, a 7.4% year-over-year increase, IDC says, followed by 3.4% bumps in 2022 and 2023.

“The 7.4% growth can be attributed to a healthy 13.8% growth from iOS devices combined with 6.2% growth from Android,” IDC says. But “5G shipments continue to be a primary driver of 2021 growth as both vendors and channels focus on 5G devices that carry a significantly higher average selling price (ASP) than older 4G devices.”

The research firm expects shipments of 5G phones to rise by 123.4% (really) year over year to 570 million. 5G smartphones are expected to represent the majority of shipments (54.1%) by the end of 2022 as manufacturers and network operators continue to push them.

IDC says the average selling price of a 5G smartphone remained flat between 2020 and 2021 at roughly $634. The price of 4G smartphones has continued to plummet, however, with the research firm saying their cost has dropped from $277 to $206 on average in the last year. That’s good news for people content with 4G, but it also explains why companies keep pushing 5G.

“Premium smartphones (priced at $1,000+) continued to grow in the second quarter as the segment displayed 116% growth from last year,” says IDC Mobile Phones research director Anthony Scarsella. “Moreover, [average selling prices] across the entire market climbed 9% as buyer preferences trend towards more costly 5G models than entry-level devices.”