Market researcher CCS Insight has downgraded its five-year outlook for the mobile phone industry. The group expects sales to fall 3 percent this year to 1.8 billion units and lowered its outlook for 2023 to 1.9 billion from a previous forecast to pass 2 billion units by 2022.
The drop in sales this year is due to a number of challenges, including lengthening replacement cycles for mobile phones, a weakened Chinese economy, and macroeconomic and political uncertainty in other major markets.
India to bounce back
CCS Insight said it downgraded its expectations in almost every market, even in India, where it projects over 320 million mobile phones will be sold in 2019, equal to growth of 5 percent. The weaker outlook in India is due to a disturbance in online retail in February and a generally cautious mood ahead of elections. However, unlike elsewhere, the market researcher expects demand in India to bounce back quickly, and the market to grow to almost 400 million units by 2023, roughly as many as in China.
Europe depression spreading to US, China
In other markets, sales are expected to remain depressed in Western Europe, where the market has contracted 23 percent in the past five years. A recent survey by the company in key Western European markets found that 35 percent of consumers plan to keep their current phone longer than their previous device. Only 13 percent said they would change their phone faster than in the past. CCS Insight sees similar dynamics taking hold in the US, where sales are forecast to drop 9 percent in 2019.
China is not immune to this trend either, and the world’s largest mobile phone market is also suffering from an economic slowdown. Sales there slumped 13 percent in 2018 and are projected to fall 9 percent this year.
From 2020, the market should start to get a boost from 5G. CCS Insight expects 220 million 5G phones will be sold in 2020, rising to 930 million in 2023 and almost half of all mobile phone sales.
