Friday, 31 May 2019 05:10

US-China trade war set to hit global smartphone market

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US-China trade war set to hit global smartphone market Image by TeroVesalainen from Pixabay

The global smartphone market faces another challenging year in 2019, with the US-China trade war the factor that will have the biggest say on whether the market returns to growth or not, the research firm IDC says.

Android shipments were forecast to grow from 85.1% in 2018 to 86.7% in 2019, due to the arrival of several new models, including devices that supported 5G. Shipment volumes were forecast to increase at a five-year compound annual growth rate of 2.1%, reaching 1.32 billion in 2023.

iPhone shipments were expected to fall to 183.5 million, a drop of 12.1% year-on-year. No 5G iPhone was expected this year, but the company had begun selling more refurbished devices, creating a sizeable revenue stream and maintaining its installed base, IDC said.

Forecasting a 1.9% decline in shipments year-on-year, IDC said 2019 would mark the third straight year of market contraction, driven by saturated markets in developed countries and slower churn in some developing nations.

The company said it expected shipments in the first half of the year to be down 5.5% year-on-year, adding that there would be an uptick in the second half of 2019, with shipments growing by 1.4% year-on-year as the take-up of 5G models accelerated.

"Even without the growing trade tensions between the US and China, the smartphone market has some important challenges that need to be resolved before we see growth again," said Ryan Reith, program vice-president with IDC's Worldwide Mobile Device Trackers.

"However, the light at the end of the tunnel is getting brighter, and growth seems within reach. The overall growth expected in the second half of this year is inclusive of a 5% decline in China during this time.

"China should be close to flat growth in 1H2020 and return to positive territory in 2H2020 as heavy 5G marketing inclusive of device subsidies is imminent."

IDC said that while design innovation would be a major driving factor in take-up, the momentum provided by 5G would play a big role.

"Amidst all these design and 5G developments, the challenge remains that consumer demands around smartphone functionality continue to expand while their tolerance for higher-priced products continues to drop," said Sangeetika Srivastava, senior research analyst with IDC's Worldwide Mobile Device Trackers.

"With 5G on the horizon as well as some interesting new form factors, it will be critical for vendors to continue to bring affordable products to market to reinvigorate the market's growth."

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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