It was going Must be the year of 5G. This was going to be the year the next generation of wireless technology helped reverse some of the troubling macro trends for the industry – or at the very least helped stem some bleeding.
But the best plan, and all this. With about a week left in the year, I think it is very safe to say that by 2020 the way most of us hoped was not a breeze. This is a list that definitely includes the lion’s share of smartphone makers. Look no further than a recent report published by Gartner to answer the question of how bad 2020 was for smartphone sales.
It was so bad that the year-over-year 5.7% global decline for the third quarter constituted good news. In a normal year, this would not qualify as good news for many industries outside of the sale of wax cylinders and asbestos. But there are some standards by which 2020 was a normal year, so we will now take some relief in the fact that the drop of 5.7% was a much less pronounced drop than the ~ 20% seen in Qs 1 and 2.
Some references before we came here. One thing that is important to note up front is that mobile was not one of those industries where everything was smooth before it was woken up by an epidemic. In 2019 I did not write the number of stories coming to the headlines, such as “Smartphone sales are expected to decline 2.5% globally this year” and “Smartphone sales decreased again in Q2, to no surprise.” And even those stories were a continuation of trends from a year ago.
The reasons for the decline should be very familiar by now. For one thing, premium handsets became expensive, regularly exceeding $ 1,000. Related to that, the phone has gone well. Good news for consumers does not necessarily translate to good news for manufacturers, as upgrade cycles have slowed significantly from their traditional every two years (an artifact of the carrier membership model). Couple with economic hardship, and you’ve got a recipe for slow growth.
This March, I wrote an article titled “5G devices were less than 1% of US smartphone purchases in 2019.” After several years of 5G promotions, perhaps, there was a certain level of cognitive dissonance. There are innumerable factors at play here. First, individual 5G models were not available in the states until the end of the year. Second, the network rollout was far from complete. And, of course, there was no 5G iPhone.
I concluded by noting that piece:
Of course, it remains to be seen how COVID-19 will affect sales. It seems safe to assume that, like every aspect of our lives, the number of people buying expensive smartphones will have a significant impact. Certainly things like smartphone purchases are of little importance in the face of something like the global epidemic.
In blindness, the answer is “a lot.” I will admit for the first time that when I wrote those words on March 12, I had absolutely no notion of how bad it was and how long it would last (nine months of Lockall). In the early days, the major issue globally was on the supply side. Asia (China in particular) was the first place to get a hit and the manufacturing epicenter was growing accordingly. Both China and its manufacturing were remarkably fast to bring back online.
In the intervening months there has been a huge drop in demand. Once again, there are several reasons for this. For starters, people are not leaving their homes as much – and for this reason, the money allocated to them for the purchase of electronics has gone towards things like PCs, because they have a remote work set-up. Have moved to. The other big issue here is simple economics. So many people are out of work and have become so uncertain that smartphones have once again risen to a kind of luxury status.
However, there are predictable reasons. It seems that 5G will eventually help the right things – although it’s hard to say. A lot of this depends on how soon we can return to “normal” in 2021. But for now, there is something Early sales of iPhone can be seen positively. According to analysts, Apple went on 5G this year, topping the sales of all other 5G handsets for the month of October (perhaps indefinitely).
The company will offer a more complete picture (sometimes including significant holiday sales) as part of its earnings report next month. For now, at least, it seems that in the end the thing is going in the right direction. Android is expected to be launched in the new year.
Perhaps 2021 will be the year of 5G – because 2020 was not sure.