5G smartphone price points set to drop to US$200
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Joseph O'Halloran
| 30 December 2020
As the next generation-infrastructures continue their expansion, a key potential gating factor to 5G development, affordable devices, looks likely to be addressed within the next twelve months says a study from ABI Research.
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In its research, 68 Technology Trends That Will Shape 2021, ABI analysts identified what they say are the key trends that will shape the technology market and others that, although attracting huge amounts of speculation and commentary, are regarded as less likely to move the needle over the next twelve months.
Fundamentally the research says 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, ABI says that 5G is the most accelerated mobile technology generation ever launched.

The research found that the accelerated migration of 5G to lower-tier smartphones will likely have a knock-on effect on average selling prices (ASPs) and the market’s overall profitability. With such a relatively shortened time for those across the value chain to extract decent margins from the market, ABI expects 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 US$200 mark, driven by the availability of cheaper components and pricing policies of chipset vendors,” noted ABI Research 5G devices research director David McQueen.

“There had been much optimism about in the smartphone market as countries started to emerge from the Coronavirus pandemic, gradually witnessing supply chains, buyer behaviour, 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.”

Yet despite the company’s general bullishness for the 5G market, the study warned that while it was not clear what the full extent or lasting ramifications of Covid-19 would be on the mobile device ecosystem, the pandemic was now overshadowed by geopolitical trade wars that could be a major impediment to the future development of the mobile devices market.