Smartphone sales will drop 2.5% this year, but 5G will drive them back up

Japan, Western Europe, and North America are expected to see some of the biggest declines of smartphone sales on record, according to a Gartner report.

Separating the hype from reality in initial 5G mobile networks and smartphones James Sanders and Karen Roby discuss the immediate future of 5G mobile networks and smartphones, and how existing equipment cannot be updated to 5G via software updates.

Smartphone sales are expected to significantly decline in the latter half of 2019, according to Gartner's Forecast: Mobile Phones, Worldwide, 2019-2023, 2019 Update report, released on Thursday. The report predicted smartphone sales in 2019 to total at 1.5 billion units—a 2.5% decline year over year.

SEE: 5G smartphones: A guide for business professionals (free PDF) (TechRepublic)

Japan, Western Europe, and North America are expected to see some of the worst declines in smartphone sales to date, at 6.5%, 5.3%, and 4.4% decline, respectively, the report found. 

"In mature markets, the high-end smartphone market is particularly oversupplied and commoditized, with higher average selling prices (ASPs) and no compelling new utility or experiences for users to upgrade to," said Roberta Cozza, senior research director at Gartner, in a press release. "Despite ASP increases on high-end smartphones slowing down recently, the vendors who primarily rely on replacement smartphone sales continue to face tough times." 

While the ban on Huawei phones has been partially lifted, negative sentiments around the brand still exist, partially contributing to some of the decline in sales, said Annette Zimmerman, research vice president at Gartner, in the release. 

However, smartphone sales won't remain low for long, with 5G predicted to drive sales in 2020, the report said. 

"Although leading mobile manufacturers have started positioning their first 5G smartphones (such as the LG V50 ThinQ, OPPO Reno 5G, Samsung Galaxy S10 5G and Xiaomi Mi MIX 3 5G), and CSPs have started to offer some aggressively priced 5G service packages, 5G smartphone sales are set to remain small in 2019," Zimmerman added in the release. "Sales will start to ramp up in the second half of 2020 as the coverage and availability of 5G hardware services improve."

For more, check out Why 5G mobile handsets will drive global 5G adoption on TechRepublic. 

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By Macy Bayern

Macy Bayern is an Associate Staff Writer for TechRepublic. A recent graduate from the University of Texas at Austin's Liberal Arts Honors Program, Macy covers tech news and trends.