A new forecast from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker shows signs of market recovery in the second half of 2019 and into 2020, pushing smartphone shipment growth back into positive territory. IDC expects shipment volumes to be nearly flat (-0.4%) in the second half of 2019 while the market declines 2.2% year over year for the full year, making 2019 the third straight year of global contraction. IDC expects shipment growth to reach 1.6% in 2020.
“The global smartphone market and relevant supply chains remain uncertain, largely due to fluctuations in U.S-China trade negotiations, making future planning even more challenging than normal,” said Sangeetika Srivastava, senior research analyst with IDC’s Worldwide Mobile Device Trackers. “Consumers continue to hold their devices for lengthier times making sales difficult for the vendors and channels alike. However, expectations of aggressive promotions and offers in the second half of 2019 aimed at helping to clear out any channel inventory and get consumers excited about the next wave of smartphone technology should steer the market back toward renewed growth.”
While global economic uncertainty mixed with constant trade/tariff threats continues to dominate headlines, a ray of hope has arrived for the smartphone world in the form of 5G. Commercial deployments have begun in many regions and while 2019 is very much an introductory year at best, 2020 looks to be the year where 5G begins to ramp up. IDC expects 5G shipments to reach 8.9% of smartphones shipped in 2020, accounting for 123.5 million devices shipped. This is expected to grow to 28.1% of worldwide smartphone shipments by 2023.
“The anticipation of 5G, beginning with smartphones, has been building for quite some time but the challenges within the smartphone market over the past three years have magnified that anticipation,” said Ryan Reith, program vice president with IDC’s Worldwide Mobile Device Trackers, in a statement. “To be clear, we don’t think 5G will be the savior in smartphones, but we do see it as a critical evolution in mobile technology. We expect the 5G ramp on smartphones to be more subtle than what we saw with 4G, but that is primarily because we are in a much different market today. The biggest difference is the level of penetration we are at now compared to 2010/2011, specifically in China, the U.S., and Western Europe. The biggest change in our 5G forecast assumptions is that we have lowered average selling prices (ASPs), particularly in China. We also expect a wide range of sub-6GHz 5G smartphones with midrange prices to enter the market in early 2020, if not sooner.”
Apple’s iOS: 2019 will remain a challenging year for iPhone shipments with volumes expected to drop to 177.9 million, down 14.8% year over year, mostly due to market maturity as well as a lack of 5G devices. However, Apple is likely to deliver 5G handsets later in 2020, which will pick up iOS volumes slightly as it will have an edge over other vendors with a better understanding of 5G market conditions for a much more planned launch.
Android: Android’s smartphone share will increase to 87.0% in 2019 from 85.1% in 2018 mostly due to 5G launches and expedited inventory cleanup of older devices. Volumes are expected to grow at a five-year compound annual growth rate (CAGR) of 1.7% with shipments of 1.3 billion in 2023. Android ASPs are estimated to grow by 3.2% in 2019 to US$263, up from US$254 in 2018, with a push from the new devices becoming available in 2H19.
Worldwide Smartphone Platform Shipments, Market Share, and 5-Year CAGR, 2018, 2019 and 2023 (shipments in millions)
Source: IDC Worldwide Quarterly Mobile Phone Tracker, August 2019.
*Forecast projections; not all figures may be exact due to rounding.
MacDailyNews Take: Predicting a number that will never be revealed. Daring.
We estimate eleventy gazillion iPhone units sales in 2019 and umpteen bazillion in 2020. And we’ll be just as right as every other so-called analyst, too, since Apple no longer reports unit sales. — MacDailyNews, November 29, 2018
A reminder of IDC’s past record of smartphone sales predictions:
• IDC: Windows Phone will not surpass Apple’s iOS by 2018 – December 2, 2014
• IDC: Windows Phone to surpass Apple’s iOS by 2016 – June 6, 2012
• IDC: Windows Phone to surpass Apple’s iOS by 2015 – June 10, 2011
Has IDC ever been right on unit shipments?
MDN: it’s Apple that refuses to publish business health indicators to its investors. You can choose to be a lackey for Apple, but IDC performs a valuable service for real investors. It is your bad choice to shoot the messenger.
You do realize the marketplace is dynamic, don’t you? Or do you think IDC should have a flawless crystal ball fed by moles in every aspect of Apple’s businesses?
IDC numbers are not that far off, especially considering that they have only spotty secondary data to work from. Also, who knows how many units Apple hides in warehouses just like every other company. The “refurb” store on the Apple website isn’t all refurbs, you know. Any manufacturer, especially in consumer goods, can goose sales whenever they feel the need. If you can find Apple products at Costco and Walmart and in the refurb section, that’s a good indicator that Apple is trying to unload slow sellers by foregoing its usual 30-50%+ profit margins. Apple would never call that a “sale” but that’s what it is, and it can skew future sales dramatically from previously published sales predictions.
If worldwide sales have declined repeatedly year over year, that’s a sign that Apple isn’t designing what the people want at any price. That is what Apple should be worried about. The cost-bulging whizbang features added to the iPhone X are simply not desirable to most users. Abandoning small screen phones is another issue limiting iPhone desirability.
Anyway, since you have so much more courage than IDC, we’ll await your sales predictions.
Maybe Apple should start listening to the customers that want an upgraded iPhone SE.
It’s been said that Xiaomi is killing it in India as they’re willing to accept no more than 5% profit on their smartphones. They’ve sold over a 100 million smartphones in India in a short period of time. What does Apple make in profits for iPhones? 35%? 40%? Man, that is just crazy and certainly not competitive. I can’t quite understand any business that can simply ignore hundreds of millions of consumers by not offering them any affordable products. It’s just throwing in the towel and saying to competitors, “Take my wife, please!” Apple can’t sell Indian or African consumers any products except maybe an iPad or two. Every other Apple product is too expensive or tied to an iPhone.
Don’t get me wrong. I’m not saying Apple should sell $200 iPhones, but surely they could sell some $350 iPhone and they’ll get at least a few customers. Give poor people a little hope, at least, of owning an honest-to-goodness iPhone. Greed may be good, but a wealthy company can do at least a little charity work for the indigent.
Apple has totally screwed itself when it comes to iPhone sales. iPhone prices are at the limits of what most consumers are willing to pay. $1000 seems to be a tipping point in consumers’ minds. Besides, the Chinese competition is just too good for most consumers to simply ignore instead of getting an Apple logo on their smartphones. I’m not going by what IDC has to say about iPhone sales, but my gut feeling says consumers will continue to hold onto their iPhones until they fall apart rather than pay what Apple is asking for new iPhones. I don’t think iPhones are too expensive especially if you get good use out of them for at least a couple of years, but I don’t need any flagship smartphone for my daily use, so that’s that. Anyway, I don’t believe in Apple being able to sell 200M for the entire 2019-2020 iPhone cycle. 160M maybe, but that’s the tops. If they drop iPhone prices $100 across the board, then there may be a decent chance of selling 200M.
Even as an Apple shareholder, I don’t expect consumers to be buying iPhones every time a new one is introduced. That just doesn’t make any sense to me. An iPhone is definitely built to last for a couple of years and I expect that’s how long a purchaser of one should keep it. I think if Apple needs to get more revenue then they should diversify the company to sell more products and services other than iPhones. Stop that lopsided iPhone dependency. Just my thoughts and nothing more.
IDC uses inaccurate estimated numbers, even when actual numbers are available! They are merely spin doctors sponsored by Apple competitors. If you think they exhibit usable intelligence you will suffer the consequences. Garbage in, garbage out. Don’t believe it? Go back over the last 10 years and chart their predictions and see a truly consistently biased failure.