Smartphone shipments will reach 1.35 billion by the end of the year, representing a 5.3% increase over the number shipped in 2020, according to a new forecast from International Data Corp (IDC).
Total smartphone shipments for the year are less than previously expected, which the research firm blamed on component shortages and logistical challenges, particularly in the third quarter.
Those challenges aren’t expected to ease up until mid-2022, at the earliest, the research firm said. As a result, IDC is lowering its smartphone growth rate for the next year from 3.4% to 3%. However, the pent-up demand will result in what the research firm calls “a modest but healthy” five-year compound annual growth rate of 3.5% starting in 2023.
The growth this year and in the future is largely due to the move to 5G devices, the shipments of which are expected to jump 117% in 2021 compared to 2020. Vendors and channels are promoting the devices because they provide increased revenues for most vendors compared to more affordable 4G devices, which saw a year-over-year decline of 22.5% in shipments.
“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,” said Nabila Popal, IDC research director for mobility and consumer device trackers, in a prepared statement. “The shortage is more heavily concentrated on 4G components than 5G, which will impact vendors with a higher portfolio mix of 4G devices [more] 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. 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 [average selling prices] over the forecast period.”
Eighty-five percent of people currently own smartphones, compared to 81% a year ago, according to Pew Research.