Global 5G smartphone shipments are expected to touch 280 million units in this year with China accounting for a lion’s share or 62% of shipments.
Canalys, a market research firm, has said in its latest report that rapid commoditization of 5G smartphones in mainland China will set the numbers spiraling upward.
In September, Realme launched its V3, following which, 5G officially became a feature for entry-level smartphone. It is the first sub-$150 5G smartphone in China, noted Canalys Analyst, Shengtao Jin. “This milestone has arrived three months earlier than expected. This will have a significant ripple effect in other regions,” he added. This includes Southeast Asia, EMEA, and even Latin America where Chinese vendors are expanding.
The economies of scale provided by the China market will allow vendors to launch more affordable 5G smartphones in other countries, even if 5G infrastructure in those markets is not fully ready. “It is expected that by 2021, nearly 60% of 5G smartphone shipments in China will be cheaper than $400. 5G penetration in China will reach 83% in the next 12 months,” commented Jin.
North America, Europe and Middle East and Africa (EMEA) follow China in the list of top 5G smartphone shipments.
How is China leading the race?
Canalys Senior Analyst, Ben Stanton, explained possible reasons behind the elephantine demand despite the current pandemic situation. “Smartphone vendors have relentlessly pushed new product launches. Online marketing and sales during the post-lockdown period have generated strong consumer interest for latest gadgets. Second half of 2020 will be more stabilized owing to gradual reopening of offline stores, improving logistics and production. With the holiday season about to kick off, there is no doubt 5G is about to be thrust into spotlight.”
The third largest region will be Europe. It is just behind Greater China and North America in terms of 5G penetration in 2020 and 2021.
“Fairly aggressively-priced 5G devices are already available in Europe such as Motorola G 5G Plus, Xiaomi Mi 10 Lite 5G. Customers are willing to wait for an iPhone with 5G in Apple-centric markets such as the UK. The ongoing uncertainty around Huawei will likely cause supply chain constraints, which will hinder its volume potential. Huawei was long-expected to play a major role in 5G smartphone adoption. Other brands such as Xiaomi, Oppo and TCL are already positioning themselves to fill any vacuum as it appears,” commented Stanton.
Accurate Site Planning (ASP) of 5G in Europe will steadily come down. This is due to Apple and Samsung’s projected share in this region – reaching $765 in 2021 and $477 in 2024.
