CCS: 300m 5G smartphones to be sold in 2021
October 11, 2017
The latest forecast from research firm CCS Insight shows the global mobile phone market remaining stable for the next five years, with about 2 billion mobile phones sold every year.
However, this steady total masks underlying shifts as feature phones continue to decline as a total proportion of the market, 4G technology dominates sales and the first 5G devices emerge.
Commenting on the forecast, CCS Insight analyst Laura Simeonova highlights the widespread adoption of 4G smartphones with high-speed connections. “By 2020, we expect 82 per cent of new mobile phones to support 4G technology. Our forecast underlines the ever increasing popularity of data services for phone owners.”
After extensive research, CCS Insight has also updated its estimates of sales of 5G devices, which will begin shipping in 2019. Simeonova comments, “By 2021 we expect 5G-capable smartphones to account for 15 percent of total worldwide shipments. The more uniform adoption of the technology globally means that take-up will be faster than 4G in its first few years. We expect China to quickly become the biggest market for 5G phones as local manufacturers and the Chinese government seek to get a head start on the rest of the world”.
The ongoing decline of feature phones as a proportion of the total market is also clear in the forecast data. Shipments of feature phones will drop from 380 million units in 2018 to 170 million units in 2021. Simeonova notes, “The longevity of feature phones has surprised us but it seems they are now in terminal decline. The widespread availability of low-cost Android smartphones and people’s desire to have near-constant access to the Internet and social networks is accelerating the trend”.
A further important finding in the forecast is the growing value of the mobile phone market. In 2018 mobile phone shipments will be worth $375 billion, and this will rise to a staggering $396 billion by 2021. The increase can partly be explained by the transition from feature phones to smartphones, but another dynamic is also at play, says Simeonova. “Flagship smartphones are breaking the rules of consumer electronics, which have traditionally fallen in price over the years. Few people will have failed to see the headlines about the $1,000 iPhone. We believe higher average prices reflect the greater perceived value of smartphones in people’s daily lives. They also reflect the commercial reality of phone-makers trying to maintain profit margins while adding more and expensive technology to their products.”