5G Phones Forecast to Account For Half of Smartphone Sales: Gartner

  • PCs, tablets and mobile phones shipments have been forecast to decline 3.7 per cent in 2019
  • Consumers holding onto their phones longer cited as one of the primary reasons behind decline

Smartphone market will decline 3.2 per cent in 2019 whereas shares of 5G-capable phones have been forecast to increase to 56 per cent by 2023 by Gartner. Gartner estimates there are more than five billion mobile phones being used around the world. After years of growth, the worldwide smartphone market has reached a tipping point. This decline in smartphones shipments, as per Gartner, would be the worst decline in history.

“This is due to consumers holding onto their phones longer, given the limited attraction of new technology. Consumers have reached a threshold for new technology and applications. Unless the devices provide significant new utility, efficiency or experiences, users do not necessarily want to upgrade their phones,” said Ranjit Atwal, senior research director at Gartner.

PC device trends in 2019

Worldwide PC shipments totaled 63 million units and grew 1.5 per cent in the second quarter of 2019, unclear external economic issues still cast uncertainty over PC demand this year. PC shipments are estimated to total 256 million units in 2019, a 1.5 per cent decline from 2018.

The consumer PC market has been forecast to decline by 9.8 per cent in 2019, reducing its share of the total market to less than 40 per cent. The collective increase in consumer PC lifetimes will result in 10 million fewer device replacements through 2023. With the Windows 10 migration peaking, business PCs will decline by 3.9 per cent in 2020 after three years of growth.

“There is no doubt the PC landscape is changing.The consumer PC market requires high-value products that can meet specific consumer tasks, such as gaming. Likewise, PC vendors are having to cope with uncertainty from potential tariffs and Brexit disruptions. Ultimately, they need to change their business models to one based on annual service income, rather than the peaks and troughs of capital spending,” added Ranjit Atwal.

5G Phones forecast to account for half of smartphone sales

5G will impact more than phones. The recent Gartner IoT forecast showed that the 5G endpoint installed base will grow 14-fold between 2020 and 2023, from 3.5 million units to 48.6 million units. By 2028, the installed base will reach 324.1 million units, although 5G will make up only 2.1 per cent of the overall Internet of Things (IoT) endpoints.

“Tanjit Atwal said, “The major players in the mobile phone market will look for 5G connectivity technology to boost replacements of existing 4G phones. Still, less than half of communications service providers (CSPs) globally will have launched a commercial 5G network in the next five years.”

It is to be noted here that more than a dozen service providers have already launched commercial 5G services in a handful of markets. Ranjot Atwal is of view that smartphone companies have started emphasizing on 5G features. He said “To ensure smartphone sales pick up again, mobile providers are starting to emphasize 5G performance features, like faster speeds, improved network availability and enhanced security. As soon as providers better align their early performance claims for 5G with concrete plans, we expect to see 5G phones account for more than half of phone sales in 2023. As a result of the impact of 5G, the smartphone market is expected to return to growth at 2.9 pr cent in 2020.”