Research firm IDC predicts that smartphone shipments will grow by 2.4% year-on-year in the fourth quarter of 2020.
Additionally, it predicts 4.4% year-on-year growth in 2021, and attributes this growth to fast supply chain recovery and incentives 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 program VP of IDC Worldwide Mobile Device Trackers Ryan Reith.
“We’ve come to the conclusion that 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.”
The IDC noted that the recovery in China was slower than anticipated because of demand for 5G being weaker than expected.
This was compounded by major brands shifting their smartphone portfolios over to 5G in the country – which resulted in consumers having fewer choices than before.
However, the IDC expects the average selling prices of smartphones in China to grow by 11.4% year-on-year, but hsipments are expected to decrease by 11.4% for the same period.
The research firm predicts that other developed markets – including North America, Western Europe, and Japan, will see year-on-year growth for the fourth quarter due to the promotions that are expected on Cyber Monday and during the festive season.
Future of 5G
The IDC also highlighted that 5G is driving the smartphone industry, and expects shipments of 5G smartphones to comprise nearly 10% of global volumes in 2020.
It also predicts that this will grow to 29% in 2024, and this will be driven by efforts to reduce 5G hardware prices to a point where they are comparable with their 4G equivalents.
“Competitive pricing will play an integral role in shaping 5G development,” said Senior IDC analyst Sangeetika Srivastava.
“The COVID-19 crisis has influenced consumer behaviour by tilting it toward more budget-friendly devices and narrowing the spend for essentials only. Aggressive promotions and more affordable 5G devices from major smartphone vendors are expected to partially offset the impact in the near term.”