The global smartphone industry size was valued at USD 457.18 billion in 2021. The market is projected to grow from USD 484.81 billion in 2022 to USD 792.51 billion by 2029, exhibiting a CAGR of 7.3% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with smartphones experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market had exhibited a decline of -7.8% in 2020 as compared to 2019.
A smartphone is a mobile handset that empowers advanced access to internet-based facilities and other digital functions. Platforms including, iOS, Android, Windows Phone and others, support a broad range of applications created by third-party originators. Factors such as the governmental support to develop telecom infrastructure, budget-centric product launch, growing 5G technology, Artificial Intelligence (AI) and other technologies and importantly, the increasing disposable income are contributing to the market growth.
Additionally, the Global System for Mobile Communications (GSMA) stated that the utilization of mobile phones specifically reduces travel for leisure and commuting. By 2025, it could result in a doubling of the avoided emissions leveraged by mobile technologies seen in 2018. As a result, it boosted the manufacturing need and usage amongst the end-users. The GSMA also stated that there would be 75.0% smartphone adoption by 2022.
Moreover, the leading companies, such as Samsung, Apple, Inc., Sony Group corporation, Oppo and Vivo, among others, are constantly unveiling innovative mobile products with 5G technology, which in turn, is fueling the market growth. For instance, in October 2021, Sony Group Corporation introduced ‘Xperia PRO-I product,’ which combines autofocus and advanced image processing, 4K 120p video recording, 1.0-type sensor and other features to offer an innovative experience to its end-users.
Disrupted Demand and Supply Negatively Affected the Shipments
In March 2020, the World Health Organization declared COVID-19 a pandemic. It has certainly affected almost every market. It has severely disrupted the balance of demand and supply in the mobile phone sector. And as a result, the shipments declined. The primary reason is a nationwide lockdown across China, India, U.K., U.S. and other major countries.
In few countries, the increasing cost was attributed to component shortages specifically the semiconductor components during the pandemic, higher logistics costs, currency/tax devaluations, quarantine mandates, travel restrictions and others. The COVID-19 pandemic is still continuing to affect consumer buying behavior as it has once again started to affect. In accordance, reinforced work from home guidelines and factory shutdown in multiple countries owing to the 2nd wave in 2021, accompanied by retail businesses’ closure and restrictions on online-deliveries affected the sales in the Q2 and Q3 of 2021 after a strong start in the beginning of 2021. However, the market participants were well-prepared for the disruption this time ahead of demand in the Q2 and Q3 of 2021.
As a result, on a long-term basis, the work from home concept, adoption of 5G technology and other factors have improved buying behavior that has shown positive market growth. Additionally, the International Data Corporation (IDC) stated that smartphone shipments saw a 7.7% growth in 2021 compared to 2020. Thus, the global market is estimated to witness strong growth in the forecast period.