China to push global 5G smartphone growth 1.5% in 2020, IDC says

group of people with smartphones
China's market for 5G will be healthy in 2020, causing a global surge in overall smartphone shipments after three years of declines. (Getty Images)

China’s ambitious 5G efforts will push the global smartphone market to growth again in 2020, according to a revised analysis by IDC that shines a more positive light on the market.

Global smartphone growth will be 1.5% in 2020, with shipments reaching 1.4 billion, IDC said on Tuesday. That number includes 190 million 5G smartphones, or about 14% of the total. The first full year of adoption of 5G smartphones will be much faster than for 4G smartphones, which made up only 1.3% of all shipments in 2010.

Smartphones have been experiencing contraction for the last three years. The news of renewed growth serves as a positive indicator for smartphone OEMs like Apple and Samsung but also for thousands of companies that make processors, sensors and components used in smartphones.

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IDC raised its short-term 5G forecast because of recent developments in China and aggressive moves by the smartphone supply chain. “There is little doubt that China will quickly become the lead market in terms of 5G volume,” said Ryan Reith, a program vice president at IDC. Also, the U.S., Korea, UK and Canada will help drive 2020 volume.

Average 5G smartphone prices will come down quickly to create the 2020 market surge, he said. One reason is that three straight years of declines in smartphone volumes has left little room to raise 5G smartphone average selling prices. Also, 4G LTE globally is already providing users with fast data speeds. Android vendors will launch lower cost 5G smartphones early in 2020 at CES and MWC, while Apple is expected to launch 5G models in September with a focus on pricing and market availability, IDC said.

While China’s 5G growth is being watched, IDC said Australia, Japan and Korea, as well as some European countries, have adopted 5G slower than predicted, IDC said. Shipments in those areas in 2019 have been “much lower than expected,” said Sangeetika Srivastava, an IDC analyst.

Accelerated 5G adoption depends on 5G network launches, operator support and substantial price cuts for more affordable 5G smartphones, Srivastava added.

Because of 5G, Android’s share of smartphones will bump up to 86.6% of all smartphones for all of 2019 (nearly 1.2 billion smartphones shipped), up from 85.1% in 2018. The five-year annual growth rate for Android is 1.7% through 2022. Android average sales prices are now $258.

Apple iPhone volumes will drop to 185 million, or 13.4% of all smartphones for all of 2019. That’s a reduction of 11% over 2018. IDC said Apple’s expected 5G handsets for late 2020 will improve iOS volumes “slightly.”

However, analysts at Strategy Analytics recently predicted that Apple will take the lead in 5G smartphones over Samsung once it enters the market.

RECENT: Report: Apple will quickly dominate 5G smartphone market 

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