Smartphone shipments will continue to grow as emerging markets are showing strong recovery following the COVID-19 related lockdowns. Latest data from research firm IDC suggests that in 2021 global smartphone shipments are expected to grow by 7.4 percent. The larger markets will still show lower shipment volumes compared to 2019 (pre-pandemic) but growing markets are expected to contribute to the recovery. The firm also notes that 5G smartphones are the main driving factor of the growth.
Compared to smartphone shipment volumes in 2019, last year and this year have shown minimal growth but growth nonetheless, as per latest data by International Data Corporation (IDC). This year, the shipments of smartphones are expected to grow 7.4 percent and by 2022, they will reach 1.37 billion units. In 2023, shipments are said to grow by 3.4 percent. For 2021, 13.8 percent growth in iOS device shipments and 6.2 percent growth in Android device shipments contributed to the 7.4 percent overall growth.
IDC also states that larger markets such as China, the US, and Western Europe will still show lower shipment volumes compared to 2019 but emerging markets like Africa, India, Japan, and the Middle East are contributing to the recovery.
The reason for this growth, though quite small is that the smartphone market was better prepared from a supply chain perspective. Ryan Reith, group Vice President at IDC's Mobility and Consumer Device Trackers said, “2020 was a bust due to the pandemic but all of the top brands continued forward with their production plans with the main difference that the timeline was pushed out. Therefore, we are at a point where inventory levels are much healthier than PCs and some other adjacent markets and we are seeing the resilience of consumer demand in recent quarterly results."
Manufacturers and vendors are focussing on 5G smartphones that have a significantly higher average selling price (ASP) than older 4G smartphones which is why 5G smartphone shipments are the main driver of this 2021 growth. While the increase in ASP of 5G smartphones is said to be just $2 (roughly Rs. 150) from 2020 to 2021, the ASP of 4G smartphones continues to decline and IDC states it has dropped by almost 30 percent this year compared to last year.
Further, the report also points out that shipments for expensive smartphones priced over $1,000 (roughly Rs. 73,300) saw 116 percent growth in the second quarter compared to last year. Their ASPs increased by 9 percent as well indicating higher demand for more expensive 5G models compared to the more budget-friendly, entry-level smartphones.