Smartphone Market Will Decline 3.2% in 2019; Share of 5G-Capable Phones to Increase to 56% by 2023
5G-Capable Phones Continue to Be On The Rise
The share of 5G-capable phones will increase from 10% in 2020 to 56% by 2023.
“The major players in the mobile phone market will look for 5G connectivity technology to boost replacements of existing 4G phones,” said Mr. Atwal. “Still, less than half of communications service providers (CSPs) globally will have launched a commercial 5G network in the next five years.”
“More than a dozen service providers have launched commercial 5G services in a handful of markets so far,” said Mr. Atwal. “To ensure smartphone sales pick up again, mobile providers are starting to emphasize 5G performance features, like faster speeds, improved network availability and enhanced security. As soon as providers better align their early performance claims for 5G with concrete plans, we expect to see 5G phones account for more than half of phone sales in 2023. As a result of the impact of 5G, the smartphone market is expected to return to growth at 2.9% in 2020.”
5G will impact more than phones. The recent Gartner IoT forecast showed that the 5G endpoint installed base will grow 14-fold between 2020 and 2023, from 3.5 million units to 48.6 million units. By 2028, the installed base will reach 324.1 million units, although 5G will make up only 2.1% of the overall Internet of Things (IoT) endpoints.
“The inclusion of 5G technology may even be incorporated into premium ultramobile devices in 2020 to make them more marketable to customers,” said Mr. Atwal.
PC Device Trends in 2019
While worldwide PC shipments totaled 63 million units and grew 1.5% in the second quarter of 2019, unclear external economic issues still cast uncertainty over PC demand this year. PC shipments are estimated to total 256 million units in 2019, a 1.5% decline from 2018.
The consumer PC market will decline by 9.8% in 2019, reducing its share of the total market to less than 40%. The collective increase in consumer PC lifetimes will result in 10 million fewer device replacements through 2023. With the Windows 10 migration peaking, business PCs will decline by 3.9% in 2020 after three years of growth.
“There is no doubt the PC landscape is changing,” said Mr. Atwal. “The consumer PC market requires high-value products that can meet specific consumer tasks, such as gaming. Likewise, PC vendors are having to cope with uncertainty from potential tariffs and Brexit disruptions. Ultimately, they need to change their business models to one based on annual service income, rather than the peaks and troughs of capital spending.”