Smartphone vendors’ pain will likely continue this year
Smartphone vendors had a tough time selling handsets last year. According to Canalys’s estimates, global smartphone shipments fell 4.6% in 2018 compared to the previous year. According to the latest estimates by Gartner, smartphone makers are likely to continue to struggle this year. However, the research house estimates that smartphone shipments will rebound in 2020.
Gartner expects a 0.5% annual decline in shipments this year but expects shipments will rebound slightly next year. That said, smartphone sales are projected to fall again in 2021.
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Smartphones will need a huge leap to see decent growth from here on
Meanwhile, Strategy Analytics predicts that while 2019 will be a sluggish year, there will be positive growth in shipments in 2020 and 2021 as 5G migration is expected to go mainstream.
Our sense is that smartphone sales are likely to be sluggish going forward as the rate of technology obsoletion has declined recently, and that coupled with lofty price tags has led to a slowdown in consumers’ upgrade cycle. Unless there is a huge leap in smartphone technology, rapid growth in smartphone shipments is unlikely.
Apple (AAPL) has already started shifting its focus to its services and has the financial muscle to double down in that segment. While Samsung (SSNLF) is currently struggling in its smartphone and semiconductor businesses, it is a very diversified company.
Meanwhile, Chinese vendors like Xiaomi (XIACF) and Huawei continue to see robust growth in global smartphone shipments, for now.