CCS Insight has forecasted that demand for smartphones has stalled as growth in this industry is up just 0.2 per cent in 2018 to 1.95 billion units. The industry is betting on 5G to improve demand in this market but doesn’t expect this to begin until 2021 at the earliest.
This forecast represents demand for smartphones in developed markets such as Western Europe and North America is declining. However emerging markets such as Asia-Pacific and Africa represent a more positive outlook but still slowing down in terms of growth.
CCS Insight VP, forecasting Marina Koytcheva said: “After a challenging 2017, our analysis suggests it’s going to be a tough ride for phone-makers in 2018, particularly those targeting western markets.”
Koytcheva points to incremental upgrades and higher prices as the reason for the current slump. Koycheva said: “Consumers in mature markets have been underwhelmed by the latest crop of flagship smartphones. Price hikes for top-end devices , with some of the latest devices hitting $1,000 or €1,000 have certainly not helped.”
Koytcheva added: “Although mature markets are suffering, there’s still growth potential in Africa, the emerging markets of Asia-Pacific and India.”
CCS Insight anticipate for the market to stabilise with the global market to increase in the coming years and expect sales to hit two billion units by 2022.
According to Koytcheva, the introduction of 5G will reignite growth in mature markets. Koytcheva said: “The arrival of 5G handsets offer a glimmer of hope for embattled smartphone makers. They’re betting that this new, faster technology will give consumers a reason to upgrade their phones.”
Koytcheva added: “Although we expect the first 5G smartphones will hit the market in 2019, really significant demand won’t start until 2021, eventually having a positive impact in 2022, when we expect over 600 million 5G phones will be sold, accounting for 31 per cent of the global market.”
With advanced markets focusing on 5G, smartphone sales in emerging markets are moving slower than anticipated with consumers opting for feature phones instead.
Koytcheva said: “The rising cost of components for entry-level smartphones and the arrival of affordable feature phones that support 4G networks mean that many people who otherwise might have bought their first smartphone are sticking with a feature phone for now.”
According to research carried out by CCS Insight, such trends are prominent in India. As a result of this research, CCS believe that smartphones will represent less than half of all mobile phones sold in emerging markets in Asia- Pacific, Africa and India in 2018.
