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Deutsche Telekom boss is wrong about 5G
Europe's biggest operator boasts success on both sides of the Atlantic, but there is scant evidence it is down to 5G.
But most growth will be in emerging markets where 5G is hitting the sweet spot.
After its worst sales performance in a decade, the global handset market is set to return to growth next year.
Industry analysts agree shipments turned the corner in the third quarter and will strengthen in the fourth quarter and expand by around 3% in 2024.
Of course, telcos would prefer to get over their dependence on consumer broadband and find growth through smart services that leverage some of the functionality of their expensive 5G gear.
But those emerging drivers – AI services, cloud, network slicing, enterprise 5G – are still nowhere near as impactful as mobile data, and one of the main drivers of demand for data is handset refresh.
The qualifier to this is that most of the growth will be in India and other emerging markets, with North America and Europe mostly flat, according to Counterpoint Research.
Emerging markets are starting to hit the 5G sweet spot, says Anthony Scarsella, research director for IDC's mobile phone tracker.
"With 5G devices becoming less relevant in most developed markets, the growth of 5G in emerging markets will play a crucial part in the rebound next year and throughout the forecast period," he said.
Transsion, Huawei growth surge
IDC predicts global 5G shipments to grow around 11% in 2023 and 20% in 2024.
"While the smartphone will witness a small 1.4% CAGR from 2022-2027, 5G shipments will demonstrate an impressive 11.1% growth rate for the same period," Scarsella said.
Canalys also sees an improved performance in the fourth quarter, with sales of 295 million units, down just 1%. While leaders Samsung and Apple recorded declines in sales, Chinese brand Transsion, the fifth largest, stood out with a 40% spike in shipments thanks mainly to African demand.
Counterpoint expects smartphone shipments to increase by 3% in the fourth quarter to 312 million units. For the full year, it's predicting a 5% decline to 1.2 billion units, the lowest since 2013 and 26% below the peak of 1.6 billion units in 2017.
Counterpoint analysts say the resurgence of Huawei is another factor behind the higher growth outlook, thanks to the surge in demand for its new Mate 60 5G series.
Huawei's October sales spiked 83% over last year, while on singles' day, China's annual online shopping event, sales were 66% higher.
As long as Huawei and its production partners can keep pace with demand for its breakthrough Kirin chipset, it will grow 37% year-over-year in 2024, Counterpoint predicts.
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