Mobile phone sales set to contract 2.4% this year; rebound likely in 2020

Mobile phone users have been "sitting on the sidelines" this so far year, which will lead to a 2.4 percent contraction in spend on the devices to $33.379 billion, says a report.

Users are postponing their purchase plans, and the devices category under the overall IT sales will grow 6.3 percent to $35.468 billion in 2020, global analyst firm Gartner said on Monday.

The negative forecast comes amid the deepening economic slowdown, driven by a drop in private consumption, and nobody is seeing any tangible improvements in the near- term. While Q1 growth hit a six-year-low at 5 percent, Q2 is expected to print in even lower.

However, according to a recent report, led by mobile phones, there was heavy jump in e-commerce sales during the just concluded festival season.

"Next year will be a rebound year for the country's IT spending as consumers return to purchasing mobile phones after sitting on the sidelines in 2019," the report said, adding the overall IT spend growth is slated to clip at 6.6 percent in 2020, from 2 percent in 2019.

The country will close 2019 with an IT spend of $88.476 billion, up 2 percent over 2018. But 2020 seems to be better, clipping at 6.6 percent at USD 94.326 billion in 2020, the report said.

The fastest growing segment will be software at 15.2 percent at $7.354 billion, followed by IT services, at 13.4 per cent to USD 17.897 billion, it said.

Growth in spends on communication services will come in at 2 percent to USD 29.788 billion in 2020, as against a marginal decline in 2019, it said, adding data centre systems spends growth will be flat at 2.5 percent at $2.819 billion.