The global smartphone market will decline sharply this year due to the macroeconomic impact of the coronavirus pandemic though sales of new 5G phones may spark a rebound toward the end of 2020, according to International Data Corp.
The research group said Wednesday it expects smartphone shipments to fall 11.9% to 1.2 billion units in 2020, following an 11.7% drop in the first quarter that was the largest in history.
For the first half of the year, shipments are expected to decline 18.2% as the COVID-19 crisis saps demand for non-essential items.
“What started as a supply-side crisis has evolved into a global demand-side problem. Nationwide lockdowns and rising unemployment have reduced consumer confidence and reprioritized spending towards essential goods, directly impacting the uptake of smartphones in the short term,” Sangeetika Srivastava, senior research analyst with IDC’s Worldwide Mobile Device Tracker, said in a news release.
The lack of demand has hit other tech sectors, with PC shipments also falling in the first quarter of 2020. But according to Ryan Reith, program vice president with IDC’s Worldwide Mobile Device Tracker, the PC market is in better shape than smartphones because people working remotely might consider replacing PC devices for an at-home office before replacing their smartphones.
“The surge in consumer spending around devices that are less mobile than smartphones (PCs, monitors, video game consoles, etc.) will undoubtedly take a share of the consumer wallet that would have been put toward smartphone upgrades and 5G,” Reith said.
But IDC also sees smartphone shipments returning to growth by the first quarter of 2021, with 5G technology playing a vital role in the recovery, especially if prices of 5G phones are comparable to the price of updating current devices.
“We’re going to see a lot of consumers who go in to buy that next device, they’re not going to buy it because it’s 5G, they’re going to buy it because it’s 5G and it’s also the same price point of what they probably would have purchased had they upgraded their current device,” Reith told TechRepublic.