Wednesday, 16 October 2019

Smartphone market to witness worst ever decline this year

By Mary Lennighan, for Total Telecom
Thursday 26 September 19

Handset replacement cycles continue to lengthen, but analyst firm predicts 5G will trigger an uptick in sales in 2020

The global smartphone market will see its worst ever decline in shipments in 2019 as consumers keep their old phones for longer, according to new forecasts from Gartner. Sales of smartphones will drop by 3.2% this year, the analyst firm predicts…

The global smartphone market will see its worst ever decline in shipments in 2019 as consumers keep their old phones for longer, according to new forecasts from Gartner.

Sales of smartphones will drop by 3.2% this year, the analyst firm predicts. It did not provide an estimated sales figure for the smartphone segment, but said it expects overall sales of mobile phones to fall by 3.9% this year to 1.7 billion units. The devices market as a whole, including PCs of various form factors, will fall by 3.7% to 2.1 billion.

The lifespan of premium phones, such as Android or iOS-powered devices, is increasing on the back of technological advancements, which mean consumers see value in their devices beyond the two-year timeframe that governed the market in recent years.

"Unless the devices provide significant new utility, efficiency or experiences, users do not necessarily want to upgrade their phones," Ranjit Atwal, senior research director at Gartner.

However, there is light at the end of the tunnel for handset makers, and its source is the arrival of 5G.

5G will trigger a return to growth in 2020, when smartphone sales will grow by 2.9%, Gartner predicts.

"The major players in the mobile phone market will look for 5G connectivity technology to boost replacements of existing 4G phones," Atwal said, noting that telcos are starting to talk up the improved performance 5G can offer, such speeds and improved network availability, as well as better security.

"Still, less than half of communications service providers (CSPs) globally will have launched a commercial 5G network in the next five years," he added.

Nonetheless, Gartner expects 5G phones to account for more than half of all smartphone sales worldwide by 2023.

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