Canalys forecast of 12% growth of the smartphone market in 2021

Canalys forecast of 12% growth of the smartphone market in 2021

Canalys forecast of 12% growth of the smartphone market in 2021

News unit 2020 with the difficulties of quarantine and A global pandemic of COVID-19 followed. A situation that has a significant impact on the smartphone market and resulted in a 7% drop in global supply. Now, according to the latest forecast of Canalys Institute, The amount of smartphone supply in 2021 will reach 1.4 billion units with a growth of 12% and the market will return to its previous upward trend. This has been largely confirmed by other research institutions. As Gartner has predicted an increase of 11.4% and IDC, with a conservative view, the supply of 1.38 billion units and an increase of 7.7% for this year’s smartphone market estimated.

Of course, Canalys analysts have further predicted that with the continuation of vaccination in various countries and the control of the Corona epidemic in the world, the supply of the required parts for smartphones will be a new bottleneck that will threaten this industry. did

Ben Stanton, research director of Canalys, says: “The flexibility of the smartphone industry is truly incredible. Smartphones are vital to people’s communication and entertainment, and they are just as important outside the home. In some parts of the world, people have not been able to spend their money during the holidays and in recent months, and many have spent their disposable income on buying a new smartphone instead. In addition, there is a strong wave of fifth-generation phones, and their supply in the first quarter [of this year] has reached 37%; While this amount is expected to reach 43% (610 million units) for the whole year. This will be accompanied by fierce competition from vendors on price, and many features, including display or [battery] power, will be sacrificed to deploy 5G in the cheapest possible devices. In this way, by the end of the year, 32% of all 5th generation devices released will have a price of less than 300 US dollars. Apparently, the time has come for widespread adoption [of this technology].”

Estimation and forecast of the global supply of smartphones in terms of network generation from 2019 to 2023

In the meantime, the bottleneck of parts supply, potential growth It will limit the smartphone supply this year. According to Stanton, the industry is in a war to supply semiconductor components, and all brands are feeling the pressure of competition in this area. Phone makers have diverted some of their resources to other regions in recent months due to the high prevalence of COVID-19 in India, but the world’s return to normal will once again make things volatile. To face these conditions, suppliers will first turn to regional prioritization and direct resources to profitable and developed markets such as China, the United States, and Western Europe; This will be to the detriment of markets such as Latin America and Africa.

But even in these areas there will still be restrictions. Therefore, companies must prioritize sales channels, allocate more resources to active and fast channels such as telecommunication operators, and at the same time provide less resources to the distribution sector and the free market. Of course, this in turn will be associated with interesting side issues and may provide an opportunity for competing brands to increase their market share if the current players are unable to meet the market needs.

Nicole Peng, vice president of mobile at Canalys, also points to market conditions and believes that “the other aspect of the market [this year] is [phone] pricing. As the price of key components, such as chipsets and memory, has increased, smartphone vendors must decide whether they can afford to absorb this cost or pass it on to consumers [through the price of the device].”

Global supply estimate and forecast Smartphones from 2018 to 2024

But despite the major limitation in the supply of LTE chips, serious challenges will be created in the market of low-end products; Where the buyers of its products are more price sensitive. Therefore, smartphone manufacturers should improve their operational efficiency in these limited conditions, while reducing their expected profit margin in the low-end product portfolio, and otherwise, expose themselves to the risk of ceding market share to competitors.

The COVID-19 pandemic has created permanent changes in the way people live, which will cause new norms for society as well as the smartphone market. In this regard, Stanton added that the channels had to change or disappear during the Corona epidemic. In developed countries, online sales channels expanded a lot and retailers had to rethink their way of doing business. As a result, many brick-and-mortar stores will close this year, and those that remain will focus more on customer support and order fulfillment. Because customers are increasingly using various channels in the purchase process. According to Stanton, innovations brought about by COVID-19, including integrated warehouses and in-car delivery, are helping retailers navigate new perspectives and hybrid sales channels. Centralized sourcing also gives channels more power to negotiate with smartphone brands and may cause some retailers to look to bypass distribution and establish direct relationships with manufacturers. A new norm that will be brutal but competitive for the smartphone industry.

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