Worldwide smartphone market down in 2018, IDC predicts
Smartphone sales continue to fall, but growth in India market and 5G phones will lead recovery
IDC has warned that the global smartphone market is likely decline again this year, after a drop of 0.3% in 2017.
The analyst company expects a similar drop of 0.2% in 2018, for a total market of 1.462bn units shipped, before a return to growth of 3% in 2019.
Economic slowdown in China was the main reason for the drop in sales in 2017. The Chinese market fell by 4.9% year-on-year in 2017, and the company expects a further decline of 7.1% and flat growth in 2019.
The biggest upside in Asia/Pacific continues to be India with volumes expected to grow 14% and 16% in 2018 and 2019. Chinese OEMs will continue their strategy of selling large volumes of low-end devices by shifting their focus from China to India. So far most have been able to get around the recently introduced India import tariffs by doing final device assembly at local India manufacturing plants. As for components, almost everything is still being sourced from China.
"With 2017 now behind us a lot of interesting market dynamics are unfolding," said Ryan Reith, program vice president with IDC's Worldwide Quarterly Mobile Device Trackers. "Even though it declined 5% in 2017, China remains the focal point for many given that it consumes roughly 30% of the world's smartphones. But plenty of pockets of growth can be found beyond China. India is now grabbing headlines and the market itself is going through some rapid transformation. Local India manufacturing continues to ramp up, despite still having a heavy dependence on China for components. The boom in India is likely to continue in the years to come, but the move toward building up local production has certainly caught the eye of many in the industry."
Outside of Asia/Pacific, the biggest regions for growth will be the Middle East, Africa, and Latin America. All three regions have relatively low penetration rates and plenty of upsides. Economic challenges have been the main inhibitor over the past two years, but IDC expects consumer spending to rise throughout the forecast and smartphones to be a big benefactor.
The other catalyst to watch will be the introduction of 5G smartphones. IDC predicts the first commercially ready 5G smartphones will appear in the second half of 2019 with a ramp up across most regions happening in 2020. IDC projects 5G smartphone volumes to account for roughly 7% of all smartphones in 2020 or 212 million in total. The share of 5G devices should grow to 18% of total volumes by 2022.
"Although overall smartphone shipments will decline slightly in 2018, the average selling price (ASP) of a smartphone will reach $345, up 10.3% from the $313 ASP in 2017," said Anthony Scarsella, research manager with IDC's Worldwide Quarterly Mobile Phone Tracker. "This year will continue to focus on the ultra-high-end segment of the market as we expect a surge of premium flagship devices to launch in developed markets in 2018. Devices featuring large AMOLED bezel-less displays, advanced camera functions, and an overall increase in speed and performance will be the driving factor in the increase of ASPs. Moving forward, we can expect this trend to continue as the ASP for a smartphone will continue to grow throughout the forecast period. In 2022, the final year of our forecast period, the average selling price for a smartphone will be $362, resulting in a 5-year CAGR of 2.9%."