Smartphone shipments to grow 13.9% in 1Q21 owing to demand recovery , 5G devices push: IDC

Smartphone shipments are forecasted to grow 13.9% on-year in the first quarter of 2021 and 5.5% for the full-year owing to a recovery in demand in a supply-side push of 5G devices, according to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker.

The global smartphone market is expected to deliver a compound annual growth rate (CAGR) of 3.6% over the 2020-2025 forecast period driven by 5G. The growth in the industry has been further accelerated by Apple’s full 5G iPhone 12 lineup, the report said.

The market tracker expects 5G smartphone shipments to grow to 69% in 2025, up from 40% in 2021.

Consequently, both factors have helped to increase the overall average selling price (ASP) for smartphones to $363 in 2021, up from the previous forecast of $349.

Increasing competition in the 5G Android space, particularly from Chinese vendors it likely to bring down 5G ASP to $404 by the end of the forecast period in 2025, it noted.

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, it said.

“IDC has seen accelerated growth in online channels, climbing to 27% share in 2020 from just 20% the prior year, as channels adapt to the pandemic lifestyle,” said Nabila Popal, research 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,” Popal added.

China and the United States, the two largest geographic markets, are forecast to grow by 5.0% and 3.5% in 2021.

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.

“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,” Srivastava said.