The Smartphone Market Is in a Pre-5G Slump

After a decade of unprecedented growth, the global smartphone market came to a standstill in 2017. The pace of innovation in the industry had slowed down noticeably and smartphones had reached mass adoption at a global scale. After global smartphone shipments dropped by 4 percent in 2018, this year is shaping up to be no better for the mobile industry. According to the latest estimates from IDC, smartphone shipments are expected to drop to 1.37 billion units in 2019, down 7 percent from the 2016 peak. “Consumers continue to hold their devices for lengthier times making sales difficult for the vendors and channels alike,” said Sangeetika Srivastava, senior research analyst at IDC.

Not all is lost for smartphone makers around the world, however, as IDC expects a return to (modest) growth in 2020. While subdued global economic growth and ongoing trade uncertainties combine for a challenging market environment, the arrival of 5G is expected provide a much-needed impetus for the smartphone industry. IDC expects 5G smartphones to account for 8.9 percent of global unit shipments in 2020 and for nearly 30 percent of total shipments by 2023. "The anticipation of 5G has been building for quite some time but the challenges within the smartphone market over the past three years have magnified that anticipation," IDC notes, adding that “we don't think 5G will be the savior in smartphones, but we do see it as a critical evolution in mobile technology.”

IDC expect global smartphone shipments to reach 1.48 billion in 2023, just above the previous peak from 2016.