Slowing demand for smartphones will see sales stagnate at the two billion mark as manufacturers place their hopes in 5G-compatible devices got future growth.
New figures from CCS Insight suggest 1.96 billion devices will be shifted in 2019 – just a 0.2 percent increase year-on-year – and growth will continue to be sluggish until 2022.
Analysts attributed slowing demand in maturing markets where incremental updates to devices are resulting in less frequent equipment refreshes, and the popularity of feature phones are hampering demand in developing markets.
Global smartphone sales
“After a challenging 2017, our analysis suggests it’s going to be a rough ride for phone-makers in 2018, particularly those targeting Western markets,” noted Marina Koytcheva from CCS Insight. “In 2018 we expect the Western European market to drop a further 7 percent and the North American market is starting to slow down too, dropping 3 percent year-on-year.
“Consumers in mature markets have been underwhelmed by the latest crop of flagship smartphones. Price hikes for top-end devices, with some of the latest and greatest devices hitting $1,000 or €1,000, have certainly not helped, and it’s little surprise more customers have decided they might as well stick with the device they already own.”
Koytcheva said there was reason for optimism in emerging markets, however the migration to smartphone had been hit by the arrival of 4G feature phones .
“The rising cost of components for entry-level smartphones and the arrival of affordable feature phones that support 4G networks mean that many people who otherwise might have bought their first smartphone are sticking with a feature phone for now,” she continued.
“Although the next couple of years are going to be tough, we’re certain that the shift to smartphones in emerging markets hasn’t evaporated — it’s merely been delayed.This year worldwide sales of smartphones will top 1.5 billion units for the first time, and by 2022 sales will nudge 1.8 billion units”.
The first 5G devices are expected to be available from 2019, with the first commercial networks arriving in the same year. However, the manufacturers pinning their hopes on 5G might have have to be patient as CCS believes momentum will only start in 2021
“Although we expect the first 5G smartphones will hit the market in 2019, really significant demand won’t start until 2021, eventually having a positive impact in 2022, when we expect over 600 million 5G phones will be sold, accounting for 31 percent of the global market.”
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