Phone sales predicted to hit ten-year low, but 5G will spearhead recovery in 2021
The market will be down 13% this yearBy Rob Thubron
Forward-looking: Like so many industries, disruption from the Covid-19 pandemic is having a devastating effect on the phone market. But while mobile sales for 2020 are predicted to hit their lowest level in a decade, there is reason to be optimistic for a 2021 recovery.
Analysts at CCS Insight believe that global demand for mobile phones in 2020 will be almost a quarter of a billion units lower than in 2019, representing a 13 percent YoY decline. They expect just 1.57 billion devices will be sold this year, the lowest in ten years.
It's noted that while life is starting to return to normal in China and manufacturing ramps up in the country, the rest of the world is under lockdown. With shops closed, people stuck indoors, and jobs at risk, demand for handsets is expected to be very weak over the coming months. The decline will be significant in the second quarter, with global sales expected to be 29 percent lower than in Q2 2019.
"Data from China gives us a good indication of the effect that lockdowns and consumer uncertainty have on demand for phones. In January and February 2020, sales volume fell 44% from the same period in 2019. Early data from other countries that have introduced strict measures to fight the pandemic suggests similar declines," writes Marina Koytcheva, vice president of forecasting at CCS Insight.
It's expected that demand for mobile phones will remain low throughout the second half of the year, even when life, hopefully, returns to relative normality, with the usually strong Christmas quarter predicted to see 3 percent lower YoY sales.
While 2020 looks like it will be a grim one for phone makers, demand is expected grow by 12 percent in 2021 as the economy recovers, people make delayed purchases, and 5G becomes more widespread. CSS believes 2022 will be even better, with growth reaching 13 percent to almost 2 billion phones.
5G is a bright spot in the phone market right now. Despite the Covid-19 restrictions, it's predicted that sales of 5G-enabled devices will reach 210 million units in 2020, ten times more than last year. As the handsets drop in price, they're expected to spearhead the market's recovery next year, and will account for 58 percent of all devices sold in 2024.