Mobile phone demand lower than pre-pandemic levels, but recovery due

Smartphones
Share

mobile phone
The mobile phone market continues its recovery in 2021 following the Covid-induced slump in 2020, but is still lacking the momentum to get back to pre-pandemic levels.

This is according to a new forecast published by technology analyst firm CCS Insight, which expects 1.65 billion mobile phones (or 52 phones every second) to be sold in 2021, an increase of 5% from 2020 but still 9% lower than in 2019. This total comprises 1.38 billion smartphones and 0.27 billion simpler feature phones.

“The mobile phone market’s recovery is becoming a tale of two divergent stories”, remarks Marina Koytcheva, vice president of forecasting at CCS Insight. “On the one hand, there are countries like the US, that are experiencing a solid macroeconomic recovery and where demand for new phones is growing nicely. But on the other, prospects in emerging economies are worsening as the pandemic drags on, denting our expectations of a speedy recovery of the mobile phone market.”

A curious exception to these two patterns is found in China, where economic output returned to its pre-Covid levels in 2020, but the mobile phone market remains weak almost a year later, as people seem to be exhibiting a growing indifference to mobile phones, preferring to spend their money on other products and services.

But the wider economic climate is not the only factor restraining the growth of the mobile phone market. The shortage of chipsets and other components continues to plague many technology sectors, from automotive to consumer electronics. “The mobile phone market is far from being the worst-affected sector, but it continues to feel the pain. However, we are observing two contrasting pictures, with less impact on lucrative premium smartphones but significant constraints on the supply of cheaper devices, whose lower profits make them less of a priority to phone-makers”, explains Koytcheva.

Come 2022, CCS Insight expects both supply and demand to increase as the global economic recovery continues and component production returns to a high enough level to meet the demands of the mobile phone industry. “In the next three years, we should see the market spike above its pre-pandemic level, as deferred purchases materialize,” notes Koytcheva. Sales are forecast to reach 1.89 billion mobile phones in 2022 and 1.92 billion in 2025.

While the market fluctuates, one trend remains firmly on track: the transition to the latest cellular technology. Over 560 million 5G-capable mobile phones will be sold in 2021, and by 2022 the number will surpass 900 million, accounting for almost 50% of all phones sold that year.

The trend is being fuelled by enthusiastic phone-makers and telecom operators keen to justify their investments in the technology by getting customers onto 5G as quickly as possible with the promise of faster and more-reliable mobile connectivity.

“Our expectations for 2022 and beyond are positive, but uncertainty remains”, warns Koytcheva. “We continue to monitor the macroeconomic situation, component supplies, and above all the unpredictability of the ongoing global pandemic.”

A summary of CCS Insight’s forecast of the global mobile phone market is shown below.

Chart Description automatically generated

More details of CCS Insight’s extensive mobile phone research service can be found at https://www.ccsinsight.com/research-areas/mobile-phones/

 

Chris Price
For latest tech stories go to TechDigest.tv