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5G smartphone price points to drop under $200 in 2021, ABI Research says

In its latest white paper titled “68 Technology Trends That Will Shape 2021,” ABI Research reports that the 5G smartphone market is now outperforming its predecessor generations on nearly every metric.

Between the number of mobile devices, subscribers, and networks available at launch, 5G is the most accelerated mobile technology generation ever launched. According to the global tech market advisory firm, this premature acceleration of 5G will drop smartphone price points to below $200 in 2021.

ABI Research’s analysts identify 37 trends that will shape the technology market and 31 others that, although attracting huge amounts of speculation and commentary, are less likely to move the needle over the next 12 months.

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“For success in 2021, especially after a very challenging 2020, one must understand fundamental trends early, and take a view on those trends that are buoyed by hyperbole and those that are sure to be uncomfortable realities. Now is the time to double down on the right technology investment,” said Stuart Carlaw, chief research officer at ABI Research.

5G smartphone price points to drop to $200

“The accelerated migration of 5G to lower-tier smartphones will have a knock-on effect on Average Selling Prices (ASPs) and the market’s overall profitability,” said David McQueen, 5G devices research director at ABI Research. “Indeed, with such a relatively shortened time for those across the value chain to extract decent margins from the market, it is expected that many will start to follow an aggressive pricing strategy to avoid possible declines in overall profits. With the expected frantic pace of plunging 5G smartphone prices, it would be of little surprise if 2021 saw 5G smartphones fall below the $200 mark, driven by the availability of cheaper components and pricing policies of chipset vendors.”

There had been much optimism about the smartphone market as countries started to emerge from the coronavirus pandemic, gradually witnessing supply chains, buyer behavior, and demand returning to some level of normality.

“Coupled with a quick expansion of 5G down the price tiers, it points to a market that is gradually coming under control and is on track to expand rapidly in 2021,” McQueen said. However, while it is not clear what the full extent or lasting ramifications of COVID-19 will be on the mobile device ecosystem, the pandemic is now overshadowed by geopolitical trade wars. These could be a major impediment to the future development of the mobile devices market.”