worldwide chip shortage

In a recent report, Canalys has reported that global smartphone sales are off 6% in the third quarter of 2021. The company says much of that is due to the worldwide chip shortage that made it impossible for mobile companies to satisfy consumer demand.

Worldwide Chip Shortage is a Legitimate Problem  

Moreover, the pandemic has had a negative influence across supply chains, and the worldwide chip shortage is the result of this debacle. Canalys chief analyst Ben Stanton states that mobile companies are working to keep up the global smartphone sales as best they can, but the worldwide chip shortage is a legitimate obstacle in the current times. 

“On the supply side, chipset manufacturers are increasing prices to disincentivize over-ordering in an attempt to close the gap between demand and supply,” he said in a statement. “But despite this, shortages will not ease until well into 2022.”

The Mobile Manufacturing Companies Are Good for Now

Furthermore, the major mobile manufacturing companies maintained their market share positions, with Samsung holding steady year over year at 23%. While Apple witnessed sales increase 3 percentage points to 15% this quarter. Xiaomi continued steadily in third place at 14%, consistent year on year.

Read more: Global Chip Shortage might Stay Until 2023

However, now there are greater chances of mobile manufacturers suffering due to the worldwide chip shortage as we are now heading into the all-important holiday shopping season. Apple released the new iPhone 13 at the end of September, too late for this quarterly report, but no doubt clocked for the shopping season.

The Component Shortage Can Badly Affect Global Smartphone Sales

The worldwide chip shortage concerns could put a restraint on its plans and affect its global smartphone sales. Even though both Samsung and Apple make their chipsets for their mobile devices, each company is still undergoing the impact of the worldwide chip shortage.

As a result, Stanton states that its unlikely customers will see any cost-cutting this year, as production costs continue to spiral upward. Rather, he assumes that we may see more bundling of phones with other devices as a shopping incentive.

“Customers should expect smartphone discounting this year to be less aggressive. But to avoid customer disappointment, smartphone brands which are constrained on margin should look to bundle other devices, such as wearables and IoT, to create good incentives for customers to maintain global smartphone sales.”

Source: TechCrunch


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