5G Phones on Track to Take Off Faster Than 4G

CCS Insight Forecast Signals 300 Million 5G Phone Shipments in 2021

There seems to be a growing view that the mobile phone market has become rather dull and predictable. A cursory glance at our latest forecast would tend to reinforce this view: we expect the market to be almost static, with sales of about 2 billion mobile phones each year for the next five years.

However, consider that number again — 2 billion mobile phones to be sold each and every year for the next five years. It is easy to be blasé, but it really is an incredible total. That's a market value of $375 billion in 2018, rising to $396 billion by 2021. There are few other products that are so prolific. The mobile phone has become part of the fabric of society.

Digging into the data a little more closely, the market isn't as static as it might seem. By 2021, just two years after launch, we expect 5G-capable smartphones to account for 15 percent of total worldwide shipments. The more-uniform adoption of the technology globally means that take-up will be faster than 4G in its first few years. China is poised to quickly become the biggest market for 5G phones as local manufacturers and the Chinese government seek to get a head start on the rest of the world.

However, the widespread adoption of 4G smartphones and the high-speed connections they offer shouldn't be forgotten. By 2020 we expect 82 percent of new mobile phones to support 4G technology. This underlines phone owners' insatiable love affair with data services, and we see that demand continuing to grow.

Of course, data consumption is almost exclusively fuelled by smartphones, leaving the humble feature phone as an obvious casualty. The forecast reflects this, with shipments of feature phones dropping from 380 million units in 2018 to 170 million units in 2021. We've been slightly surprised by the longevity of feature phones; although they won't disappear completely over the next five years the widespread availability of low-cost Android smartphones and people's desire to have near-constant access to the Internet and social networks mean their days are numbered.

One final observation is the growing value of the mobile phone market. As mentioned above, in 2018 mobile phone shipments will be worth $375 billion, rising to a staggering $396 billion by 2021. The increase can partly be explained by the transition from feature phones to smartphones, but another dynamic is also at play. Flagship smartphones are breaking the rules of consumer electronics, which have traditionally fallen in price over the years. Few people will have failed to see the headlines about the $1,000 iPhone, and higher average prices reflect the greater perceived value of smartphones in people's daily lives. Of course, they also indicate the commercial reality of phone-makers trying to maintain profit margins while adding more and expensive technology to their products.

The chart below provides a summary of CCS Insight's mobile phone forecast.

CCS Insight's mobile phone forecast provides data on sell-in volume and the installed base of mobile phones in 10 geographic regions. It also offers details of shipments and market value of smartphones and non-smartphones and splits by technology. It's available to our customers here. If you're not a CCS Insight client, or if your subscription doesn't include access to the forecast, This e-mail address is being protected from spambots. You need JavaScript enabled to view it to find out more.

This entry was posted on October 11th, 2017 and is filed under Devices. You can follow any responses to this entry through the RSS 2.0 feed or you can leave a response.

Posted By Laura Simeonova On October 11th, 2017

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