Emerging Markets Will Drive Next Wave of Global 5G Smartphone Sales: Realme-Counterpoint White Paper

Two years after the launch of the world’s first commercial 5G network, the race continues. OEMs (original equipment manufacturers) are rapidly expanding their 5G offerings and accessibility, driving the adoption of the next-generation wireless standard across key markets including the US, Europe and China.

The global uptake of 5G is outperforming all previous cellular generations. While shipments of 4G devices took almost four years to reach 200 million, 5G-capable devices reached that number in just half the time, according to a new white paper titled “Making 5G Global: Accessibility for All” jointly developed by Chinese smartphone maker realme and Counterpoint Research.

In the first quarter of 2021, the paper noted, almost one out of every three smartphones sold worldwide was a 5G-capable device, with sales in China accounting for more than half of that number.

The study, which explores the global adoption of 5G smartphones, the current market landscape and leading manufacturers, also predicts that one out of every two smartphones sold globally will support 5G by the end of 2022.

5G vs 4G shipments, years from launch*

Manufacturers, mobile carriers and industry watchers are awaiting the next wave of 5G adoption as emerging markets including India, Indonesia and Latin America are beginning to roll out commercial fifth-generation networks and services.

The next wave of 5G adoption will be aided by a continued decline in smartphone prices, the white paper pointed out, referring to the anticipated phenomenon as “a new dynamic” brought about by 5G capabilities.

In the past, premium segments have traditionally dominated in the early adoption stage; but in 2020, 5G phones in the low-to-mid-range price segments accounted for nearly 40% of all 5G devices sold, the report stated, adding that average selling prices (ASP) are likely to continue to fall by double-digit percentages in the foreseeable future.

5G smartphone share of total sales

“Lower-cost devices have been one of the key drivers of 4G growth in many low- and middle-income markets. We saw this dynamic happen in South Asia between 2017-2019, where smartphone adoption amongst adults increased by 30% to almost half the population. This will be just as important for 5G, especially as we start to see more emerging markets come online,” said Kalvin Bahia, principal economist at GSMA Intelligence.

While price might be one aspect that attracts today’s young, savvy users across these emerging markets, they will not be willing to compromise on a device’s design or performance.

Based on survey findings and research conducted by realme on 5G mobile phone preferences, users prefer thinner, lighter devices with more appealing designs as they simultaneously weigh an array of other functional elements such as camera systems, screen size, memory capacity and battery size.

“5G smartphone development has entered the 2.0 era. This means we need to deliver a complete 5G mobile experience from a performance view, but packaged elegantly in thinner, lighter, more unique designs. It also means offering a full portfolio of devices – from no-compromise affordable to premium flagships bringing technological innovation,” CEO of realme India and Europe Madhav Sheth said.

Realme, which broke records by becoming the world’s fastest smartphone brand to reach 50 million sales, has grown to become one of the top five brands in its key markets, including India, Indonesia, Bangladesh and the Philippines.

It achieved a quarter-over-quarter growth of 74% in the global 5G smartphone market in Q1 2021, coming to control 2% of the market share, the report showed. The brand, together with its fellow cohort of newer Chinese OEMs such as Oppo, Vivo, Xiaomi and OnePlus, accounted for one-third of all worldwide 5G smartphone sales in the first quarter of 2021.

From the start, realme had a precise target — young consumers who wish to purchase high-quality gadgets without breaking the bank. It was ranked third in the highly competitive $100-$199 wholesale ASP band, while also gaining significant market share in the $200-$299 mid-end segment thanks to its efficient online sales channels, creative marketing campaigns and wide range of offerings.

Global 5G smartphone sales share by wholesale price band, 2020

Figures from the report show that over the past two quarters, almost one out of every five 5G smartphones came from the $200-$299 price tier, signifying a great deal of potential of the segment with the biggest drivers being Asian countries including India, which is expected to roll out 5G next year.

5G smartphone average selling prices

Moving forward, realme will remain focused on developing and scaling up its 5G portfolio, especially in India, Southeast Asia and Europe with lower prices and enhanced capabilities. It commanded a 13% share of India’s smartphone sales over the past year and has seen its share of domestic 5G sales jump to 12% in just two quarters.

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“Professional imaging capabilities, enlarged and enhanced screens, more storage and memory and better battery life – all supported by next-generation processors – combine to make 5G not just about the connection, but about a connected life,” the white paper concluded, adding that anticipated demand for 5G devices in emerging markets will contribute to the biggest area of growth in one of the biggest technological upgrades in recent times.