The worldwide smartphone market is forecast to decline 11.9% year over year in 2020 with shipments totaling 1.2 billion units, according to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker. The forecast follows the largest year-over-year decline in history in the first quarter of 2020 (1Q20). Smartphone shipments are now expected to decline 18.2% in the first half of the year as the macroeconomic impact of the COVID-19 pandemic continues to affect consumer spending. Global smartphone shipments are not expected to return to growth until the first quarter of 2021 (1Q21).
“What started as a supply-side crisis has evolved into a global
demand-side problem. Nationwide lockdowns and rising unemployment have
reduced consumer confidence and reprioritized spending towards essential
goods, directly impacting the uptake of smartphones in the short term,”
said Sangeetika Srivastava, senior research analyst with IDC’s Worldwide Mobile Device Trackers.
“On the brighter side, 5G is expected to be a catalyst throughout the
forecast period, which will play a vital role in worldwide smartphone
market recovery in 2021.”
From a geographic standpoint, the Chinese economy will continue to be
impacted by COVID-19, however signs of improvement are showing as
lockdowns and supply chain disruptions have begun to ease a bit. For the
most part, factories have resumed operations and the market has opened
with some travel and logistical restrictions, leading IDC to believe the
China domestic market will only see a single digit decline in 2020. In
contrast, Europe has been hit hard by COVID-19, especially in severely
impacted countries like Italy and Spain, which will cause a double-digit
decline in the region this year. Nonetheless, IDC expects the top
vendors in the region to maintain their market shares driven by rotating
strategies such as higher flagship launches and forming stronger
ecommerce footprints.
“China’s recovery has been impressive to say the least, especially given the initial impact of COVID-19 on the country,” said Ryan Reith, program vice president with IDC’s Worldwide Mobile Device Trackers.
“There’s no question that challenges lie ahead for the smartphone
industry and we believe the economic downturn is going to cause some
fluctuation in the vendor and price-tier landscape. The surge in
consumer spending around devices that are less mobile than smartphones
(PCs, monitors, video game consoles, etc.) will undoubtedly take a share
of the consumer wallet that would have been put towards smartphone
upgrades and 5G. We believe this will result in even more aggressively
priced 5G smartphones than expected prior to the pandemic. This could
result in some share wins for the vendors that position their portfolios
to capitalize on this change.”
