It appears that the crippled economy caused by the coronavirus pandemic is having more of an impact than experts originally predicted. New data from market research firm Strategy Analytics projects that smartphone sales will fall by a staggering 21 percent in 2020.
Part of that decline is due to the financial effects of COVID-19 both on the pockets of consumers and the production lines of device manufacturers. However, longer smartphone lifespans are also keeping people from buying a new device. Experts believe that these factors may have a damaging impact on the rollout of 5G.
Tough Gets Tougher
The global introduction of 5G has been anything but smooth. Hardware to support the faster network is scarce. Devices that support it are even scarcer. Those that do include 5G capabilities typically cost upwards of $1,000. Meanwhile, conspiracy theorists are now blaming 5G cell towers for causing the COVID-19 pandemic. Spoiler alert—that isn’t true.
What is true, however, is that these factors have made the 5G rollout a headache. The global pandemic isn’t helping anything. Early in the timeline, China’s smartphone market was hit hard, experiencing a steep drop in device sales during January and February. Fortunately, it appears that the disturbance in that market is slowly correcting itself.
In the United States, the story is different. Millions are still self-quarantining and there isn’t a definitive plan to restart the economy. While the present effects are apparent, the long term ones are even more concerning. As of this week, 26 million Americans are now out of work. Those individuals almost certainly won’t be spending $1,000 on a new 5G phone anytime soon.
Recovering from the coronavirus pandemic will take months—if not years. That’s why Strategy Analytics predicts such a steep drop in smartphone sales for 2020. The 21 percent freefall that it projects is sadly realistic.
For the rollout of 5G, that’s a problem. If users aren’t buying new devices it means that they aren’t upgrading to the new network. As telecom providers seek to expand their infrastructure, having customers that aren’t paying for it is going to be a serious issue.
Despite the painful economic consequences of the COVID-19 pandemic, smartphone manufacturers continue to unveil their newest devices. April alone has seen big releases from Apple, OnePlus, Huawei, and Samsung.
Meanwhile, Strategy Analytics notes that 5G network launches are also continuing in 2020. It counts more than 15 commercial launches since the start of the year. Most of these are in Asian countries like China, Thailand, and Japan.
Some experts argue that the pandemic could actually be a positive thing for 5G. The faster network has helped frontline workers and remote employees stay connected. Moreover, many claim that it will help stimulate the recovery of the economy in a post-coronavirus world.
So, while the timing of the pandemic isn’t ideal for the global rollout of a new network, all hope isn’t lost. Rather, experts warn that consumers and businesses alike should temper their expectations. 5G innovations expected to arrive this year may be better suited to a 2021 unveiling.