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Gartner projects 2.5% drop in worldwide smartphone sales

Gartner projects 2.5% drop in worldwide smartphone sales

Worldwide sales of smartphones to end users will total 1.5 billion units in 2019, a 2.5% decline year over year, according to Gartner.

The global research and market analysis firm states that in terms of worldwide smartphone sales to end users by region, worldwide 2018-2020, Japan (-6.5%), Western Europe (-5.3%) and North America (-4.4%) are set to exhibit the worst declines.

For Sub-Saharan Africa, the figure stipulated for 2019 is 90,104 (measured at thousands of units).

Table 1:

Worldwide Smartphone Sales to End Users by Region, Worldwide 2018-2020 (Thousands of Units)

Region

2018

2019

2020

Eastern Europe

47,054

45,043

43,911

Emerging Asia/Pacific

357,208

352,168

382,439

Eurasia

49,083

49,695

51,519

Greater China

423,411

411,095

424,501

Latin America

128,664

125,675

118,268

Mature Asia/Pacific

31,176

30,062

30,863

Middle East and North Africa

75,607

76,336

77,864

North America

174,219

166,510

164,853

Sub-Saharan Africa

88,753

90,104

91,917

Western Europe

147,179

139,421

142,924

Japan

33,914

31,722

31,794

Grand Total

1,556,269

1,517,830

1,560,853

Source: Gartner (August 2019)

"In mature markets, the high-end smartphone market is particularly oversupplied and commoditised, with higher average selling prices (ASPs) and no compelling new utility or experiences for users to upgrade to. Despite ASP increases on high-end smartphones slowing down recently, the vendors who primarily rely on replacement smartphone sales continue to face tough times," said Roberta Cozza, senior research director at Gartner.

Gartner analysts expect total smartphone sales to decline in the second half of 2019, continuing the trend witnessed in the first half.

Annette Zimmermann, research vice president at Gartner said: "The ban on Huawei (even though currently partially lifted) has created negativity around the Huawei brand and is likely to open a few opportunities for other manufacturers in overseas markets such as Western Europe. "Despite the US administration's directive that allows US suppliers to work with Huawei again, the situation remains unclear. The latter part of the second quarter of 2019 was certainly challenging for Huawei in EMEA and Latin America. However, its leading position in its home market remained unchanged."

2020 improvement

Gartner analysts do expect smartphone sales to grow again in 2020, driven by broader availability of 5G models and the promotion of 5G service packages in various parts of the world by communications service providers (CSPs).

Analysts also expect the first 5G Apple iPhone to launch in 2020, which should entice iPhone users to upgrade.

"Lengthening smartphone replacement cycles and a ban on Huawei accessing technology from US-based suppliers weakened demand for smartphones in the first half of 2019," Zimmermann continued. "We expect demand to get even weaker in the second half as replacement of high-, low- and mid-end smartphones continues to slow, due to low value benefits."

"Although leading mobile manufacturers have started positioning their first 5G smartphones (such as the LG V50 ThinQ, OPPO Reno 5G, Samsung Galaxy S10 5G and Xiaomi Mi MIX 3 5G), and CSPs have started to offer some aggressively priced 5G service packages, 5G smartphone sales are set to remain small in 2019. Sales will start to ramp up in the second half of 2020 as the coverage and availability of 5G hardware services improve," she added.

Gartner forecasts that sales of 5G smartphones will top 15 million units in 2019, which will represent less than 1% of total smartphone sales in that year.

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