May 30, 2018
Worldwide Smartphone Volumes Will Remain Down in 2018 Before Returning to Growth in 2019 and Beyond, According to IDC
FRAMINGHAM, Mass. May 30, 2018 – After declining 0.3% in 2017, the worldwide smartphone market is expected to contract again in 2018 before returning to growth in 2019 and beyond. According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, smartphone shipments are forecast to drop 0.2% in 2018 to 1.462 billion units, which is down from 1.465 billion in 2017 and 1.469 billion in 2016. Looking further out, IDC expects the market is to grow roughly 3% annually from 2019 onwards with worldwide shipment volume reaching 1.654 billion in 2022 and a five year compound annual growth rate (CAGR) of 2.5%.
The biggest driver of the 2017 downturn was China, which saw its smartphone market decline 4.9% year over year. Tough times are expected to continue in 2018 as IDC forecasts consumption in China to decline another 7.1% before flattening out in 2019. The biggest upside in Asia/Pacific continues to be India with volumes expected to grow 14% and 16% in 2018 and 2019. Chinese OEMs will continue their strategy of selling large volumes of low-end devices by shifting their focus from China to India. So far most have been able to get around the recently introduced India import tariffs by doing final device assembly at local India manufacturing plants. As for components, almost everything is still being sourced from China.
mobilityView believes that the trend in hardware ASPs will only continue and accelerate as 5G devices enter the marketplace. The rate of inflation on Smartphone Hardware is anywhere from 5x to 10x (or more) the core rate of inflation in most developed countries. Employees are asking for larger reimbursements to reflect these increased hardware costs; and the current monthly allowance (also known as a Stipend) method is no longer working. However, mobilityView have been contacted by companies that implemented the Stipend method years ago (having felt they solved the problem) and are saying that mobilityView’s approach, vision and predictions have been accurate. Take a look at some of our earlier posts around Hardware ASPs.Back