Analyst firm IDC on Thursday said global smartphone shipments are expected to drop nearly 10% for all of 2020, amid concerns that 5G handset demand is very low.
Fueling the downward trend: Second quarter shipments were down by 17%.
While IDC expects a full recovery in the market by 2022, analyst Ryan Reith said consumer demand for 5G smartphones remains “very low.” When the low demand is paired with economic headwinds, vendors and service providers will be pressured to drop hardware and service fees associated with 5G.
Low 5G demand and a poor economic climate will accelerate a drop in average selling prices going forward, IDG added. China in the second quarter priced 43% of 5G devices under $400, for example. Globally, 5G smartphone average prices will hit $495 by 2023, IDC expects. In 2019, the average sales price for a 5G smartphone is more than $800.*
In that year, half of smartphones sold will be 5G smartphones, IDC said.
Before the COVID-19 pandemic hit, IDC and other analysts had forecast a return to smartphone sales growth in 2020 after three years of declines. In 2021, with lower-priced 5G smartphones, year-over-year growth will improve by 9%, but the real recovery will happen in 2022.
For all of 2020, IDC expects more than 1.2 billion smartphones to ship, including about 210 million 5G smartphones.
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*This story was corrected to state the average selling price of a smartphone is more than $800.