5G Handset ASPs to Drop Below $400 Next Year: IDC

Global smartphone shipments are expected to reach 1.38 billion handsets this year, rising 7.7% over 2020, reported IDC Wednesday. That trajectory is expected to continue into 2022, with 3.8% growth to 1.43 billion. “Markets worldwide continue to migrate toward 5G,” said IDC. “Within emerging markets, there is strong demand for mid-range and low-end 4G phones following last year's pandemic slowdown.” It projects a 3.7% compound annual growth rate in smartphone shipments through 2025. The chip shortage remains a concern for smartphone OEMs, but the impact has been far less than in other markets, said IDC. “Smartphones are seeing competition for consumer spending from adjacent markets like PCs, tablets, TVs and smart home devices, yet that hasn't slowed the market's path to recovery,” said analyst Ryan Reith. A strong “supply-side push” toward 5G continues, and prices of such handsets are dropping, said Reith. IDC expects average selling prices for 5G Android devices to drop 12% in 2021 to $456 and then below $400 in 2022: “With 5G shipments expected to grow nearly 130% in 2021, almost all regions outside of China will see triple-digit growth.”