5G Smartphones Shipments to Touch 1.9 Billion Mark by 2023

Canalys, a leading market research company, published a new report that forecasts that there will be over 1.9 Billion 5G Smartphones shipped from 2019 to 2023 with an expected CAGR of 179.9%. According to the report, China will account for 34.0% of the 5G smartphone shipments in 2023, followed by North America at 18.8% and Asia Pacific at 17.4%

Canalys recognizes that government initiatives to accelerate 5G development are a powerful and effective driver for faster roll-out in some markets, such as China and the US. There was a phenomenal amount of 5G discussion at this year’s MWC Shanghai, with Chinese 5G licenses granted a year earlier than planned. The role of the Chinese government and the well orchestrated joint investments of operators and equipment suppliers were critical to this earlier commercial launch, believes Nicole Peng, Vice President of Mobility at Canalys.

The market-research firm forecasts that in 2020, 17.5% of smartphones shipped in China will be 5G-capable, and this percentage will rise sharply to 62.7% in 2023. 5G smartphones will see rapid adoption in China, thanks to a strong government technology road-map and operators’ financial capabilities. China is also home to many major 5G equipment suppliers and smartphone vendors, which will be responsible for an aggressive marketing push over the next few years.

But mass market adoption of 5G smartphones does not necessarily mean successful 5G deployment. Full 5G deployment will take much longer, and be much more complex than the previous network generation. In order to realize the benefits of 5G beyond eMBB (enhanced Mobile Broadband). And this is very costly, putting more pressure on global operators, which are already facing declining revenue and more price competition from MVNOs.

Investments by Chinese operators’ in 5G will reach US $5 billion this year, and around 70,000 to 90,000 5G base stations will be built across the country. Among the three operators, China Mobile will be extending its market advantage, given its vast user base and financial strength. China Mobile has the broadest 5G smartphone portfolio at launch. Given the government has just implemented the long-awaited mobile number portability policy, all three operators will be even more aggressive with promotions to target 5G early adopters and high value customers later this year. Unsurprisingly, local Chinese brands, such as Huawei, Oppo, Xiaomi and ZTE, are 5G handset launch partners for the three operators, while Samsung will also use this window of opportunity to fight back in China. However, Apple will miss out, leaving loyal iPhone users waiting another year, which might result in users switching to 5G compatible devices.

Click here for Canalys’ Smartphone Analysis service.