Long term gain to follow short term pain in smartphones – IDC

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The worldwide smartphone market is expected to return to growth in 2019 “and beyond”, but not before some more shrinkage in the immediate future, according to figures from IDC.

The company said smartphone shipments will drop 0.2 per cent in 2018 to 1.462 billion units, decreasing from 1.465 billion in 2017 and 1.469 billion in 2016. But the market is expected to grow by around 3 per cent annually from 2019, with shipment volumes reaching 1.654 billion units in 2022.

The biggest driver of the 2017 downturn was China, IDC said, which saw its smartphone market decline 4.9 per cent year-over-year. This year, China is expected to decline another 7.1 per cent before flattening out in 2019.

The biggest upside in Asia Pacific continues to be India, with volumes expected to grow 14 per cent and 16 per cent in 2018 and 2019 respectively. Chinese vendors will look to continue their volume strategy by shifting their focus from China to India, with “most” able to get around import tariffs by doing final device assembly at local Indian manufacturing plants.

“The boom in India is likely to continue in the years to come, but the move toward building up local production has certainly caught the eye of many in the industry,” Ryan Reith, programme VP with IDC’s worldwide quarterly mobile device trackers said.

Outside of Asia Pacific, the biggest regions for growth will be the Middle East, Africa and Latin America. All three have “relatively low penetration rates and plenty of upsides”, IDC said. Economic challenges have been the main inhibitor, but the firm expects consumer spending to rise throughout the forecast and “smartphones to be a big benefactor”.

The other catalyst will be the introduction of 5G devices. IDC said the first commercially-ready 5G-capable smartphones will appear in the second half of 2019, with a ramp-up across most regions happening in 2020.

IDC project 5G smartphones will account for around 7 per cent of all smartphones in 2020, equal to 212 million units.

Author : Steve Costello – Senior Editor