Smartphone market expects recovery with arrival of 5G technology

With the activation of the 5G signal – started last week in Brasília and scheduled for other capitals later this semester – sales of cell phones compatible with the new technology should double, helping to save the smartphone market, which has been in decline.

According to data from the consultancy IDC Brasil, 45.8 million devices were sold in 2021, a drop of 6.1% compared to 2020. For this year, the projection was for recovery, but the lack of products and the economic crisis cooled the perspectives.

IDC expected a 4.5% to 5% increase in sales this year, but revised its expectation to 0%, with a chance of even a further retraction, according to IDC research manager Reinaldo Sakis.

One of the problems was the lack of components that come from Asia, where the pandemic intensified in the first months of the year, affecting local industry and exports.

“Brazilian retailers placed orders, but manufacturers were not delivering,” says Sakis.

The situation is more normalized now, but the economic crisis has disrupted business in Brazil, both for those who sell cell phones and for those who buy. Retailers reduced the size of inventories to preserve cash. Consumers, on the other hand, were affected by inflation and rising interest rates.

“Brazilians’ pockets are more compromised”, recalls Sakis.

This situation, added to the price of smartphones, which has inhibited sales. In 2021, the average value of handsets sold was BRL 1,845, an increase of 19.5% compared to 2020. Earlier this year, it reached BRL 2,230, an increase of 21%, according to IDC.

The price increase is explained by the skyrocketing costs of components and freight, in addition to the manufacturers’ strategy to focus launches on products presented as “premium” (with larger screen, expanded memory, higher resolution camera and other features).

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Even in this difficult context, smartphones with 5G are standing out. The IDC consultant says that high-end cell phones have maintained high levels of sales.

“What is falling are entry-level and lower-value products, which are purchased at Casas Bahia. Sales of devices from R$ 4 thousand upwards are growing by almost triple digits. The population with higher purchasing power, less economically impacted by the crisis, continues to buy cell phones”, says Sakis.

The activation of 5G in the capitals will be an extra stimulus to move the market, being able to attract people who are enthusiasts of new technologies and also those who have been postponing the exchange of the device.

Smartphones compatible with the new generation of internet are expected to account for 25% of sales at the end of 2022, against 10% at the end of 2021, according to Sakis.

“By the end of the year, there will be more 5G products being sold, greater variety in the portfolio and more launches of intermediate and even entry-level products, so the average price in this segment will fall”, says the analyst at IDC.

By the end of 2021, the average price of 5G devices was around R$5,000, a value that dropped to R$3,900 earlier this year. Currently, there are 67 cell phone models in Brazil capable of running 5G approved by Anatel.

The leaders in portfolio variety are Samsung (with 25 models), followed by Motorola (14), Apple (9) and Xiaomi (6). Prices start from approximately R$ 1,500. The information is from the newspaper. The State of São Paulo.