Research

5G Drives Device Growth, Begins to Push Out 4G

• By David Nagel
• 08/31/21

The price of mobile connectivity is on the rise as 5G begins to shut out 4G. 5G phones are significantly more expensive than 4G phones, and that gap is widening as 5G phones double in volume.

The overall growth of 5G phones will be 123.4 percent this year compared with last year. According to market research firm IDC, worldwide, smartphone shipments will increase 7.4 percent this year compared with last year and will continue to grow 3.4 percent per year for the next two years. That growth is being fueled by new 5G phones, whose average selling price is $634 this year (up $12 from last year), compared with $206 for 4G phones (down $71 from last year). Further, phones costing more than $1,000 grew 116 percent in the second quarter of 2021, during which the overall average price increased 9 percent.

According to IDC, China is by far the largest consumer of 5G phones, soaking up 47.1 percent of the world's shipment volume. The United States is a distant second at 16 percent, followed by India (6.1 percent) and Japan (4.1 percent).

iOS devices are growing at 13.8 percent, followed by Android at a more modest 6.2 percent.

"The smartphone market was better prepared from a supply chain perspective heading into 2020 given almost all regions were expecting to grow and vendors were preparing accordingly," said Ryan Reith, group vice president with IDC's Mobility and Consumer Device Trackers, in a prepared statement. "2020 was a bust due to the pandemic but all of the top brands continued forward with their production plans with the main difference that the timeline was pushed out. Therefore, we are at a point where inventory levels are much healthier than PCs and some other adjacent markets and we are seeing the resilience of consumer demand in recent quarterly results."

For more information, visit IDC's Worldwide Quarterly Mobile Phone Tracker.