5G focus drives up phone prices in China

With more local brands shifting their focus to 5G, the average selling prices (ASPs) of smartphones in China is expected to edge up 11.4 percent year over year in 2020, according to IDC.

However, weaker than expected 5G demand is slowing recovery in China.

“Competitive pricing will play an integral role in shaping 5G development. The COVID-19 crisis has influenced consumer behaviour by tilting it toward more budget-friendly devices and narrowing the spend for essentials only. Aggressive promotions and more affordable 5G devices from major smartphone vendors are expected to partially offset the impact in the near term,” said Sangeetika Srivastava, Senior Analyst with IDC’s Worldwide Mobile Device Trackers.

Japan is among the other developed markets, predicted to see year-over-year growth in the holiday quarter driven, by strong seasonal promotions and lucrative shopping days like Cyber Monday.

Smartphone shipments are forecasted nudge up 2.4 percent year over year in Q4, followed by 4.4 percent year-over-year growth in 2021.

Fueled by a quick supply chain recovery as well as significant incentives from both OEMs and channels on new 5G products. IDC expects the global market to grow each year through 2024 at a five-year compound annual growth rate of 1.3 percent.

“Despite concerns around weakness in 5G demand, smartphone volumes exceeded the forecast in Q3 and supply-side momentum headed into the holiday quarter and 2021 remains strong,” said Ryan Reith, Program Vice President of IDC’s Worldwide Mobile Device Trackers.

“We’ve come to the conclusion that despite on-going lockdowns and economic concerns, consumers in many markets around the world have shifted their normal spending from things like travel, dining out, and general leisure to things like consumer electronics. Smartphones happen to be a benefactor of this transition,” he added.

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