Smartphone shipments to return to growth in holiday quarter: IDC

According to the IDC 'Worldwide Quarterly Mobile Phone Tracker', smartphone shipments are forecast to grow 2.4 per cent (on-year) in the fourth quarter of 2020, followed by 4.4 per cent growth in 2021.

New Delhi: As consumer spending shifts from travel, dining out and general leisure to consumer electronics during the pandemic, the global smartphone market is expected to return to growth during the holiday quarter this year amid strong push towards 5G, according to a new IDC report.

According to the IDC ‘Worldwide Quarterly Mobile Phone Tracker’, smartphone shipments are forecast to grow 2.4 per cent (on-year) in the fourth quarter of 2020, followed by 4.4 per cent growth in 2021.

---

The market rebound will be fuelled by an impressively quick supply chain recovery as well as significant incentives from both original equipment manufacturers (OEMs) and channels on new 5G products.

“Despite concerns around weakness in 5G demand, smartphone volumes exceeded the forecast in 3Q20 and supply-side momentum headed into the holiday quarter and 2021 remains strong,” said Ryan Reith, programme vice president with IDC’s Worldwide Mobile Device Trackers.

“Despite on-going lockdowns and economic concerns, consumers in many markets around the world have shifted their normal spending from things like travel, dining out, and general leisure to things like consumer electronics. Smartphones happen to be a benefactor of this transition,” Reith informed on Wednesday.

IDC expects the global market to grow each year through 2024 with a five-year compound annual growth rate (CAGR) of 1.3 per cent.

From a technology standpoint, 5G is the driving force for the industry right now.

The 5G smartphone shipments are expected to reach close to 10 per cent of global volume in 2020 and grow to 29 per cent in 2024.

“Despite concerns about the lack of demand for 5G, it is apparent that the wheels are in motion to transition the mobile industry to the latest network technology,” the report mentioned.

A key factor to accomplish this will be getting the cost of 5G hardware close to or on par with 4G phones.

“Competitive pricing will play an integral role in shaping 5G development. The COVID-19 crisis has influenced consumer behaviour by tilting it toward more budget-friendly devices and narrowing the spend for essentials only,” said Sangeetika Srivastava, senior IDC analyst.