Smartphones sales to fall in 2019

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Smartphone sales will drop 2.5% this year to 1.5 billion units, according to Gartner. However, sales are set to return to growth in 2020, driven by broader availability of 5G models and the promotion of 5G service packages.

Gartner said that with the first 5G Apple iPhone expected in 2020, iPhone users may look to upgrade giving the market a further boost.

“Lengthening smartphone replacement cycles and a ban on Huawei accessing technology from U.S.-based suppliers weakened demand for smartphones in the first half of 2019,” said Gartner’s Annette Zimmermann, “we expect demand to get even weaker in the second half as replacement of high-, low- and mid-end smartphones continues to slow, due to low value benefits.”

“Although leading mobile manufacturers have started positioning their first 5G smartphones (such as the LG V50 ThinQ, OPPO Reno 5G, Samsung Galaxy S10 5G and Xiaomi Mi MIX 3 5G), and CSPs have started to offer some aggressively priced 5G service packages, 5G smartphone sales are set to remain small in 2019. Sales will start to ramp up in the second half of 2020 as the coverage and availability of 5G hardware services improve,” Zimmermann said.

Gartner is forecasting that sales of 5G smartphones will top 15 million units in 2019, which will represent less than 1% of total smartphone sales in that year.

The markets in Japan (-6.5%), Western Europe (-5.3%) and North America (-4.4%) are expected to suffer the worst declines in sales of smartphones in 2019.

“In mature markets, the high-end smartphone market is particularly oversupplied and commoditised, with higher average selling prices (ASPs) and no compelling new utility or experiences for users to upgrade to. Despite ASP increases on high-end smartphones slowing down recently, the vendors who primarily rely on replacement smartphone sales continue to face tough times,” explained Gartner’s Roberta Cozza.