Smartphone Market in For Rough Ride in 2020, Future Bright: CCS Insight

  • The global outbreak of Covid-19, as per CCS Insight, will stifle mobile phone sales in 2020
  • The impact on the global economy is forecast to continue even after the outbreak is over

Global demand for mobile phones in 2020 will be almost a quarter of a billion units lower than that in 2019. This, as per a recent report by CCI Insight, represents a 13 per cent fall down.

“We expect that only 1.57 billion mobile phones will be sold worldwide in 2020, the lowest number in a decade, with smartphones reaching just 1.26 billion units, down from 1.41 billion in 2019,” read CCI Insight report.

Phones (Pic Credit – Pxfuel)

Data from China an indication

Data from China, as per the report, is a good indication of the effect that lockdowns and consumer uncertainty have on demand for phones. In January and February 2020, sales volume of phones fell 44 per cent from the same period in 2019. Early data from other countries that have introduced strict measures to fight the pandemic points to similar declines.

Demand for mobile phones in these markets (apart from China) will be very weak over next few months, as people stay at home, shops are closed and the uncertainty for families and businesses is high. CCI Insight expects global sales of mobile phones in the second quarter of 2020 to be 29 per cent lower than those in the second quarter of 2019.

“In the second half of 2020, when life returns to a new normal, we expect appetite for mobile phones to remain subdued, as a weak macroeconomic environment will see many consumers and businesses delay new purchases and upgrades of existing mobile phones. Even as the situation improves, the traditionally strong Christmas quarter is expected to deliver 3% lower sales this year than in 2019,” read the report.

Demand to grow in 2021

The demand for mobile phones, as the report highlighted, will grow by 12 per cent in 2021, almost reaching the levels seen in 2019. As the economy recovers further in 2021, delayed purchases will deliver another boom in the form of 13 per cent growth to almost two billion phones.

“In an effort to offset the weakness in the first half of the year, we believe phone-makers will do everything they can to grab a piece of the shrinking smartphone pie by offering advanced capabilities like 5G at the punchiest prices possible,” read the report.

It continued, “In 2020, we forecast that 5G-enabled phones will reach sales of 210 million units, a tenfold increase compared with 2019, with about half of the volume coming from China. In 2024, sales of 5G phones are projected to hit 1.15 billion units, accounting for 58 per cent of all mobile phones sold that year.”