Canalys reported this morning that global smartphone sales are down 6% this quarter, and it’s not because of a lack of demand. This is due to the global shortage of chips.
The pandemic has had a negative impact on all supply chains and chips have been particularly affected. Canalys senior analyst Ben Stanton says manufacturers are trying to keep pace as best they can, but the chip shortage is a legitimate hurdle right now.
“On the supply side, chip makers are raising prices to discourage oversupply in an attempt to close the gap between demand and supply,” he said in a statement. “But despite this, the shortages will not abate until 2022.”
What was the market like in the last quarter due to these supply chain issues? Well, the usual suspects have maintained their market share, with Samsung remaining stable year over year at 23%. Meanwhile, Apple saw its sales increase 3 percentage points to 15% this quarter. Xiaomi remained in third place at 14%, unchanged from year to year.
Image credits: Canalys
Manufacturers need to be concerned about this turn of events, especially as we head into the crucial holiday shopping season. Apple released the new iPhone 13 at the end of September, too late for this quarterly report, but arguably scheduled for shopping season. Chip shortage issues could put a damper on his plans. Even though Samsung and Apple make their own chipsets for their mobile devices, every business is still feeling the impact of the chip component shortage.
As a result, Stanton says consumers are unlikely to see a reduction in costs this year, as manufacturing costs continue to climb. Instead, he anticipates that we might see more bundling of phones with other devices as an incentive to buy.
“Customers should expect discounts on smartphones this year to be less aggressive. But to avoid customer disappointment, smartphone brands that are limited in terms of margin should look to bundle other devices, such as wearable devices and IoT, to create the right incentives for customers. “
CNBC reported yesterday that the consumer chip shortage could persist even longer than Stanton predicts, perhaps up to two or three years, according to Hisense Chairman Jia Shaoqian, whose devices the company makes devices like. household appliances and consumer goods.