Smartphone Shipments To Grow In 2019, After 3% Drop in 2018

IDC has just put out a new report citing that it believes smartphone shipments will drop about three-percent worldwide in 2018, before it returns to growth in 2019 through til 2022. This isn't surprising news, considering the smartphone market has plateaued for quite a few years now. While there are more smartphones being made, and more companies making smartphones, users are keeping their smartphones even longer. Thus, people aren't upgrading their smartphones as often. IDC is expecting about a three-percent drop in shipments in 2018, and then it'll switch over to growth in 2019 in the "low single digits".

According to the chart below from IDC, it is expecting the Android platform to drop about three-percent. iOS is expected to drop about 2.5-percent and "Others will drop a massive 72.2-percent year-over-year. With Android having 85-percent market share and iOS at around 14.8-percent market share. That's not quite three-percent overall, like IDC is quoting though, and it's important to note that these are "Shipments" and not sales. These are essentially smartphones that have been shipped to partners to be sold, but not particularly sold.

In its report the IDC states that while the ongoing US-China trade war does have the industry on edge, it is unlikely to really impact the shipments worldwide just yet. It is still expecting to see growth next year. It believes that "continued developments from emerging markets, mixed with potential around 5G and new product form factors, will bring the smartphone market back to positive growth." However, if the trade war does escalate it could lead to more drops in the smartphone market in the coming years. This is because virtually every smartphone is made in China. Not to mention the parts for those smartphones are also made in China (with a few being made in South Korea). But IDC is expecting a rather flat year in 2019, then returning to decent growth in 2020 through 2022.

Background: With 5G becoming a big deal for smartphones in 2019, it won't be too surprising to see more smartphone shipments, of course the numbers will be artificially inflated a bit. Seeing as you're going to have many smartphone makers making the same smartphone twice. One as a 4G LTE smartphone and the other as a 5G smartphone for a specific carrier in a certain country. Of course, none of this is really different compared to the industry went through with 4G LTE about ten years ago when LTE smartphones started to launch. Carriers and smartphone makers were making specific phones for each carrier, since each carrier was doing LTE a bit differently - and some didn't launch LTE until a few years later. So you had a smartphone that was basically the same, but available under about eight different names in the US, between all the carriers. That also means carrier exclusivity is going to be coming back, and in a big way in 2019. And that will be unfortunate, and confusing for many.

5G isn't going to be the only selling point for smartphones in 2019, however. It will also be the fact that you'll be able to pick up a foldable smartphone. Now these foldable smartphones will not be massively popular, partly due to the fact that they are not being mass produced and thus are much more expensive. But foldable phones are coming and users are going to be pretty excited for them. Samsung showed off its first foldable phone at its developer conference not to long ago, and while it's not final, it is expected to ship in 2019. It is also expected to be close to $2,000 for a single phone, so it won't be super popular, but this could get people  interested in smartphones once again. And that is going to mean that smartphone shipments will again be on the rise.

Impact: The trade war with China could really affect the smartphone industry, and there's a number of reasons why. China is still the largest market for smartphones with the US at number two and India at number three (quickly coming for that number two spot though). So not only are these smartphones made in China, but it's also a big market for many of these manufacturers. And if China slaps some pretty steep tariffs on these smartphones, it could really affect how many smartphones are sold. For instance, a 25-percent tariff could take an already overpriced, $999 smartphone and make it $1249, just because. Hopefully President Trump and President Xi are able to strike a deal and keep this trade war from happening. President Trump has said that he is working on a deal with China and is getting close to finalizing it, so hopefully that trade war can be avoided here.

The smartphone market has been in an upward trajectory for over a decade, almost two decades. So it was about time that it did start to decline a bit. It can only grow so much before it ends up shrinking a tiny bit. The smartphone market has also plateaued in recent years, with smartphones coming out every year and not being all that much different than what came out the year before. This is part of the reason why we are seeing smartphone prices rising (that and components prices are rising as well), and why people are keeping their smartphones longer. They don't see a need to upgrade every single year, especially when these smartphones are not all that different from what they already have. The fact that $1000 is now the new normal for a flagship smartphone is pretty crazy, when flagships were just $650-700 about two years ago. That's a pretty big jump - and it didn't really stop in the middle at all, just jumped around $300 thanks to Apple with the iPhone X last year. The smartphone industry is not going to start shrinking this year or next year, it'll continue to grow, but the growth rate won't be anything like it has been in the past decade. That is because there are less and less people without a smartphone these days. Which means there is less room to grow.

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About the Author
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Alexander Maxham

Section Editor
Alex has written for Androidheadlines since 2012 as Editor of the site and traveled the World to many of the biggest Smartphone and Technology events. Alex has a background in Technology and IT and Deep Passion for Everything Android and Google. His specialties lay in Smartphones of all budgets, Accessories, Home Automation and more. Contact him at [email protected]
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