IDC has posted its new predictions for the smartphone market, this time around for the next five years. According to the company's Worldwide Quarterly Mobile Phone Tracker, smartphone shipments will continue to decline this year, making 2019 the third straight year to witness a slowdown.
Overall shipments are predicted to reduce by 0.8-percent to 1.39 billion units in the current year. However, all is not doom and gloom, as the sales momentum is expected to pick up in the second half of the year, with year-over-year growth of-2.3 percent. The upward trend is then expected to continue well into 2023 with sales touching 1.54 billion units.
The report also reiterates the reasons behind the current downturn which include longer device replacement cycles, geopolitical tensions, and weakening China economy. However, innovations such as 5G and foldable smartphones are expected to take the industry out of the lull.
Although numerous OEMs have 5G-based smartphones lined up for 2019, adoption will most likely be slow. IDC predicts that this year, sales of 5G-ready handsets will represent a paltry 0.5-percent of the overall sales. By 2023, the market share of 5G-enabled smartphones is expected to increase to a whopping 26-percent, which means roughly one out of every 4 smartphone purchases would be a 5G device.
3G phones are forecasted to become non-existent by 2023, with market share falling to 2.2-percent from 4.1-percent in 2019. However, according to the report, 4G smartphones are not going away anytime soon. 4G-based handsets are expected to have the lion's share of the market share this year, and they are forecasted to be the most popular devices in 2023 as well, with a market share of more than 71-percent.
While IDC is an esteemed organization, the smartphone market is a dynamic one and things may not turn out quite the way it has speculated. The first generation 5G smartphones are expected to carry a hefty price tag because 5G is still a nascent technology. So, it's a given that in the first few years, 5G devices will only attract customers who have the cash to burn.
However, with carriers, chipmakers, and smartphone makers all trying to expedite 5G adoption, we may see costs falling sooner than expected and this can boost adoption rates. Similarly, simply promising increasing speeds might not be enough to get consumers to switch, developers will have to churn out apps that can actually leverage faster speeds. Such apps can justify the higher prices of 5G phones.
Another innovation that the industry is betting on to rescue the smartphone market from its current bearish state is the foldable smartphone. However, the first generation of foldable handsets are reportedly battling their own challenges, from creasing screens to thick dimensions. Samsung has already announced that it will produce a limited number of Galaxy Fold units this year. However, the company reportedly has two more foldable handsets in the pipeline. Huawei has also revealed its foldable smartphone, and other OEMs are also expected to join the fold.
So, while IDC may or may not be spot on with its predictions, it is apparent that OEMs are desperate to turn the tide around and with chipmakers and carrier on board, the market is poised to be on an upward trajectory again.