Friday, July 23, 2021

Smartphone shipments will grow 12% despite chip shortages

Market intelligence company Canalys is forecasting that global smartphone shipments will grow 12% this year, despite challenges posed by the chip shortage. However, it says that phone makers will need to choose their priority countries and regions…

According to Canalys’ latest forecasts, the worldwide smartphone market will grow 12% in 2021, with shipments reaching 1.4 billion units. This represents a strong recovery from 2020, when shipments fell 7% due to major market constraints caused by the COVID-19 pandemic. As vaccine rollout continues around the world and the pandemic is subdued, component supply will emerge as the new bottleneck for the smartphone industry.

Component supply bottlenecks, however, will limit the growth potential of smartphone shipments this year. “Backorders are building,” said research manager Ben Stanton. “The industry is fighting for semiconductors, and every brand will feel the pinch.” In recent months, vendors redirected some allocation to other regions due to the COVID-19 outbreak in India, but this is not sustainable as the world returns to normal.

Vendors will first turn to regional prioritization, focusing the flow of units into lucrative developed markets such as China, the US, and Western Europe at the expense of Latin America and Africa.

Canalys says companies will also have to decide whether or not to increase prices.

“The other angle to this is pricing,” said Canalys VP of Mobility Nicole Peng. “As key components, such as chipsets and memory, increase in price, smartphone vendors must decide whether to absorb that cost or pass it on to consumers.”

Chip production may be helped by $52 billion in planned investment by the US government.

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Canalys recently estimated that Mac shipments grew 35% year-on-year in the first quarter of 2021, but that Apple fell to second place.

For the first time since Q3 2019, Apple lost its position as the top PC vendor in the US (including tablets), despite posting 36% growth. Nevertheless, Apple performed well considering Q1 tends to be a weaker quarter for Mac and iPad shipments.

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