Good news: Market forecasts 5G smartphone shipments to increase, but prices to continue to fall

Market research firm IDC expects the global smartphone market to resume growth during this year-end holiday sales season, with growth of 2.4% in the fourth quarter of 2020 and 4.4% in 2021.

IDC predicts that the rebound in the smartphone market will be driven by a rapid recovery in the supply chain and significant incentives for new 5G products from handset OEMs and channels.

5G smartphone prices will continue to fall

IDC predicts that by 2024, the global 5G mobile phone market will grow at a five-year compound annual growth rate (CAGR) of 1.3% per year.

Ryan Reith, program vice president of IDC's Worldwide Mobile Device Trackers, said that despite concerns about weak 5G demand, smartphone sales exceeded expectations in the third quarter of 2020, and the growth momentum of mobile phone sales entering the holiday sales quarter will remain strong in 2021.

IDC expects 5G smartphone shipments to approach 10% of global sales in 2020, growing to 29% by 2024.

Despite concerns about a lack of demand for 5G, 5G is driving the mobile industry's transition to the latest network technology. A key factor in achieving this goal will be making the cost of 5G hardware close to or the same as 4G phones.

IDC predicts that the average selling price of global 5G mobile phones will drop 25% to US$611 in 2020, and will drop to US$453 by 2024.

Competitive pricing will play an integral role in driving the development of 5G. Promotional activities by major smartphone vendors and more affordable 5G mobile devices are expected to offset the impact of insufficient demand in the short term, said Sangeetika Srivastava, senior analyst for IDC's Worldwide Mobile Device Trackers.