IDC: Global smartphone shipments expected to grow 5.3% in 2021

According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, shipments of smartphones will grow 5.3% year over year in 2021, reaching 1.35 billion shipments. Due to the lower than expected third quarter and the continued component shortages and logistical challenges, which may not improve until mid-2022, however, IDC has lowered its growth forecast for 2021 and 2022 from 7.4% and 3.4% to 5.3% and 3.0% respectively. Looking at 2023 and beyond, IDC continues to expect a modest but healthy 3.5% five-year compound annual growth rate (CAGR) fueled by pent-up demand, declining average sale prices (ASPs), and continued transition from feature phones to smartphones, the firm said in a press release.

“Although we expected a slowdown in the third quarter, the market declined by almost twice the projected rate as the supply chain and logistical challenges hit every major player in the market. Moreover, the shortage is more heavily concentrated on 4G components than 5G, which will impact vendors with a higher portfolio mix of 4G devices than vendors with a higher proportion of 5G models. These challenges surrounding 4G components have shifted our short-term forecast for Android more than iOS, which is now primarily 5G,” said Nabila Popal, research director with IDC’s Mobility and Consumer Device Trackers. “On the positive side, this is expected to accelerate the jump to 5G, which is now forecast to be almost 60% of worldwide shipments by this time next year, slowing the decline in smartphone ASPs over the forecast period.”

Heading into the holiday quarter, all regions are forecast to see a single-digit decline with the most significant decreases expected in Asia/Pacific (excluding Japan and China) (APeJC) and China where shipments will be down 9.1% and 8.4% year over year respectively. However, due to the robust growth in the first half of this year, all regions except China will finish 2021 on a positive note. Within China, a slowdown in consumer demand will have shipments finishing flat to slightly lower in 2021 (-0.2% year over year) and 2022 (-0.6% year over year). Demand in all other regions remains strong with almost no channel inventory as supply continues to be less than demand. IDC expects this unmet demand will be pushed forward into the coming quarters and years, contributing to healthy long-term growth.

“As with our previous forecast, 2021 will represent peak average selling prices as Android will end the year at $265 while iOS climbs to a staggering $950,” said Anthony Scarsella, research director with IDC’s Worldwide Mobile Device Trackers. “The continued demand for premium models in developed markets has 2021 ASPs growing 11.4% to $382, up from $343 one year ago. In addition, the record-breaking $950 ASP for iOS in 2021 has Apple controlling nearly 43% of all smartphone revenues despite only a 17.1% market share. However, moving forward, prices in the overall market will slowly fall as 5G devices will decline 14.5% in 2022 while 4G devices drop more than 18% next year as the market continues to shift towards 5G.”