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5G won't return mobile market to growth in 2020

(Image credit: Future)

New figures from Gartner have provided further evidence that the coronavirus pandemic will result in a major decline in smartphone sales and delay the impact of 5G handsets this year.

The analyst firm is predicting the mobile phone market will contract by 14.6 per cent this year, as restrictions on movement and an economic slowdown cause delayed or cancelled purchases of new devices.

Globally, the month of February and the first quarter of 2020 saw the biggest contractions in market history.

Gartner smartphones

The disruption exacerbated existing difficulties. After many years of explosive growth in the early 2010s, the smartphone market has contracted over the past few quarters. Market saturation, a perceived lack of innovation, and the increasing cost of handsets have all been cited as contributory factors.

It had been hoped the arrival of 5G networks would reverse this trend but the pandemic means this will not be the case, at least in in 2020. Gartner says 5G handsets will represent just 11 per cent of total shipments this year, boosted by sales in China.

As the initial epicentre of Covid-19, China was the first country in the world to impose restrictions on citizen movement and activity in a bid to contain the virus’s spread. However lockdown measures are now easing and the government has made 5G leadership a priority. Sales in the country rose by 14.2 per cent in April, providing hope to other markets that recovery is around the corner.

“While users have increased the use of their mobile phones to communicate with colleagues, work partners, friends and families during lockdowns, reduced disposable income will result in fewer consumers upgrading their phones,” explained Ranjit Atwal, senior research director at Gartner. “As a result, phone lifetimes will extend from 2.5 years in 2018 to 2.7 years in 2020.”

However the trend towards remote working saved the PC market from collapse. Sales will fall by a tenth in 2020 but this would have been worse without purchases of laptops and Chromebooks to support people working from home during the pandemic.

“This trend combined with businesses required to create flexible business continuity plans will make business notebooks displace desk-based PCs through 2021 and 2022,” added Atwal.