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Smartphone shipments to grow 5.5% in 2021 due to strong 5G push – IDC

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Smartphone Shipments

The International Data Corporation (IDCWorldwide Quarterly Mobile Phone Tracker, smartphone shipments are forecast to grow 13.9% year over year in the first quarter of 2021 and 5.5% for the full year 2021.

This growth will be driven by continued recovery in demand and a supply-side push of 5G devices. IDC expects the global smartphone market to deliver a compound annual growth rate (CAGR) of 3.6% over the 2020-2025 forecast period.

“Despite ongoing lockdowns and economic concerns, IDC continues to see strong demand for smartphones. We are also seeing that everyone in the value chain – from supply chains, OEMs, and channels to consumers – is better prepared to handle any further lockdowns. IDC has seen accelerated growth in online channels, climbing to 30% share in 2020 from just 22% the prior year, as channels adapt to the pandemic lifestyle,” said Nabila Popalresearch director with IDC’s Worldwide Mobile Device Trackers. “Ramp ups in production and improved channel planning combined with strong pent-up demand are all pointing to healthy growth in the months ahead.”

China and the United States, the two largest geographic markets, are forecast to grow by 6.0% and 3.5% in 2021.

The outlook for China remained stable despite several city-level lockdowns in January 2021, reflecting the strength of consumer confidence there. Despite a 10-11% year-over-year decline for both markets in 2020 amidst the pandemic, 5G development and the success of the recently launched iPhones are expected to boost shipments in 2021.

5G remains the driving factor in the industry, accelerated further by the success of Apple’s full 5G iPhone 12 line up.

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IDC expects 5G smartphone shipments to account for more than 40% of global volume in 2021 and grow to 69% in 2025.

Both factors have helped to increase the overall average selling price (ASP) for smartphones to $363 in 2021, up from $349 in IDC’s previous forecast.

In regards to 5G ASP specifically, increasing competition in the 5G Android space, particularly from Chinese vendors, will bring downward pressure on 5G ASPs, which are expected to drop to $404 by the end of the forecast period in 2025.

“The strong performance in the last quarter of 2020 has led to a huge push from all OEMs to increase production. Although this may create some temporary challenges in production, we do not foresee any significant gap as the manufacturers successfully cope with the ramp up,” said Sangeetika Srivastava, senior analyst with IDC’s Worldwide Mobile Device Trackers. “On the other hand, this is likely to intensify the pressure on smaller vendors as larger vendors are given priority by ODMs, making it harder for them to obtain targeted volumes.”

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