IDC: Smartphone Market to Return to Growth in 2020

Global shipments are expected to dip 2.2% this year.

| More on:
Hand holding smart phone with online shop concept on screen

Image source: Getty Images

It’s been a rough few years for the global smartphone industry, which has seen unit volumes plateau as the market matures and upgrade cycles continue getting longer. The slowdown has hit premium devices the hardest, which is partially why Apple (NASDAQ: AAPL) has been so laser focused on growing its services business in recent years. The Cupertino tech giant is reportedly planning to launch an affordable mid-range iPhone early next year, which could help spur sales.

Market researcher IDC has released new estimates on what to expect for the smartphone market.

Android dominance ticks even higher

Total smartphone shipments are expected to decline 2.2% this year to approximately 1.37 billion before increasing a modest 1.6% in 2020. Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) subsidiary Google is expected to grow Android’s worldwide market share to 87% this year, up from 85% in 2018, thanks in part to 5G adoption. That will put Apple’s iOS market share at 13%.

“Consumers continue to hold their devices for lengthier times making sales difficult for the vendors and channels alike,” IDC research analyst Sangeetika Srivastava said in a statement. “However, expectations of aggressive promotions and offers in the second half of 2019 aimed at helping to clear out any channel inventory and get consumers excited about the next wave of smartphone technology should steer the market back toward renewed growth.”

The average upgrade cycle in the U.S. is now 33 months, according to separate estimates from Strategy Analytics released last month.

Optimism around 5G is also helping to mitigate macroeconomic fears around escalating trade tensions between the U.S. and China. 5G shipments are expected to take off in 2020 and reach 123.5 million — 9% of smartphones shipped next year. That proportion should proceed to climb to 28% of smartphones by 2023, according to IDC’s forecast.

“The anticipation of 5G, beginning with smartphones, has been building for quite some time but the challenges within the smartphone market over the past three years have magnified that anticipation,” IDC’s Ryan Reith added. The 5G ramp won’t be as sharp as 4G since the market has changed dramatically, according to Reith.

Apple is widely expected to introduce a 5G iPhone in 2020 following its settlement with Qualcomm earlier this year that secured 5G modem supply. IDC expects Apple’s iPhone volumes in 2019 to fall 15% to 177.9 million, since the Mac maker is going to be later than rivals in adding 5G technology, but IDC notes that the company will be able to get a better understanding of 5G market conditions for when it does launch its 5G handsets.

Apple is hosting its annual iPhone event tomorrow, at which the company is expected to unveil three new models for 2019.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Evan Niu, CFA, owns shares of Apple. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool owns shares of QCOM and has the following options: short January 2020 $155 calls on Apple and long January 2020 $150 calls on Apple. The Motley Fool has a disclosure policy.

More on Tech Stocks

grow dividends
Tech Stocks

Beyond Shopify: This Lesser-Known Canadian Growth Stock Is Set to Soar

Shopify (TSX:SHOP) stock may still be on the rise, but it won't rise by much anytime soon. However, this other…

Read more »

Tech Stocks

Shopify Stock or Constellation Software: What’s the Better Buy?

Constellation Software (TSX:CSU) and Shopify (TSX:SHOP) are worthy Canadian tech stocks worth a watch going into June 2023.

Read more »

Money growing in soil , Business success concept.
Tech Stocks

1 Dirt-Cheap Growth Stock I’ve Been Drip-Feeding in 2023

This growth stock is up 58% in 2023 alone but has so much more room to grow if analysts are…

Read more »

a person watches a downward arrow crash through the floor
Tech Stocks

Nuvei Stock Is on Fire This Year: Is It a Good Buy Today? 

Nuvei stock jumped 65% and then plunged 25% in five months. What tipped the rally and the dip? Is it…

Read more »

Paper airplanes flying on blue sky with form of growing graph
Tech Stocks

Investing in Growth? These TSX Stocks Have the Potential to Soar

These three TSX stocks have so much more room to run for investors wanting to get in on a deal…

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Tech Stocks

Don’t Forget About Shopify Stock! Here’s Why More Gains Could Be Coming

Shopify (TSX:SHOP) stock is back on the retreat and may be a worthy dip buy for investors who missed the…

Read more »

bulb idea thinking
Tech Stocks

Maxar Technologies: Is Space the Next Investing Frontier?

Maxar Technologies was acquired but there are other alternatives.

Read more »

Mature financial advisor showing report to young couple for their investment
Tech Stocks

Want $1 Million for Retirement? Invest $50,000 in These 2 Stocks and Wait a Decade

Investing in quality growth stocks such as Nuvei can help investors turn a $50,000 investment into $1 million within a…

Read more »