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For Smartphone Manufacturers, 2021 Raises Chances Of A Recovery

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Description of For Smartphone Manufacturers, 2021 Raises Chances Of A Recovery

Smartphone sales fell 12.5% in 2020, but the situation is expected to improve in 2021, Gartner analysts predict. Including in the smartphone market, where sales fell significantly last year, with a drop of 12.5% over the year as a whole, as reported by the Gartner institute. Just over 1.3 billion smartphones were sold last year, a significant drop from 2019 when 1.5 billion devices were sold. A poor performance that owes a lot to concerns related to the economic impact of the health crisis, which has led many of us to reduce our expenses and delay the purchase of a new smartphone.
This drop-in consumer spending has shifted the market from "stagnation" to "decline," said Annette Zimmermann, an analyst at Gartner. "If we go back to December 2019, before the pandemic, we predicted a stagnant market for 2020, due to weaker overall demand and weaker products with little technological innovation," said the latter.
Hope remains however for smartphone manufacturers. The final quarter of 2020 showed early signs of recovery: Global smartphone sales fell only 5.4%, largely due to Apple's launch of the iPhone 12 5G. The California-based firm posted double-digit growth in the latter part of the year, with sales reaching nearly 80 million devices.

The Fight between Apple and Samsung

The launch salvo at Apple allowed the American giant to propel itself to the top of sales in the last months of the year, taking the first place of smartphone sellers globally for the fourth quarter of 2020.
In doing so, the iPhone maker overtook Samsung, which had previously dominated the market. "Samsung lost to Apple because of the new iPhone, which Samsung didn't have a lot to fight against," says Annette Zimmermann. “Apple's smartphone was really what people were looking for, and Samsung couldn't benefit from updates from their own user base. So everything was really being done to put Apple in its shoes,” said the analyst.
The outlook for the industry as a whole looks brighter for the year ahead: Gartner previously predicted that, with the adoption of 5G, the number of devices shipped in 2021 would increase by 11.4% to the level global and would move closer to 2019 levels again. Much of the postponed consumer spending due to the health crisis can therefore be expected to occur this year, especially as more 5G devices are available at increasingly lower costs. Gartner analysts predict that 5G-enabled devices will account for 35% of total smartphone sales in 2021.

Xiaomi makes smile everything

After Apple, only one smartphone seller has seen growth in 2020: Chinese manufacturer Xiaomi, which has seen its sales share jump by almost 34% since 2019, to reach more than 11% of the market. Growth can be attributed in part to Huawei's woes. Gartner's latest analysis shows that following the Shenzhen firm's listing on Washington's "blacklist" and the blocking of Google services on its devices, Huawei recorded the largest drop in the top five smartphone vendors in 2020.
"Companies like Xiaomi are probably the biggest beneficiaries of Huawei's decline," says Annette Zimmermann. And predict a flourishing success for the Chinese firm "with double-digit growth over the next 18 months". "Of course, if you look at the regional breakdowns, the vast majority of the volume comes from China, but we have certainly seen growth in Europe. It is still a fairly small base, but with very strong growth," adds she does.
Although so far the battle seems to be playing out between giants like Apple and Samsung, some emerging players are stepping up in the market. The trends emerging for next year already look more interesting than what 2020 had to offer.