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Components Shortage Wreaks Havoc On Smartphone Industry
The component shortage has been a matter of concern for the tech industry since the COVID-19 pandemic crippled the world. And, smartphones have suffered the same fate as other sections. Due to decelerated production schedules, the stock became smaller and launches got delayed. All of this has led to a decline in the sale of smartphones in Q3 of 2021 compared to Q3 of last year, reports Gartner.
As per the numbers shared in the report, sales to consumers have dropped by 6.8 percent. A drop in components such as integrated circuits for power management and radio frequency has dented the production of smartphones globally.
"Despite strong consumer demand, smartphone sales declined due to delayed product launches, longer delivery schedule, and insufficient inventory at the channel," Anshul Gupta, senior research director at Gartner, said in a statement.
Samsung Conquers The Throne
Gupta said that the production schedules of "basic and utility" phones were hit badly by supply chain issues compared to the "premium" ones. This is the reason behind the increased sales of premium smartphones during this period, even though smartphone sales declined overall.
This left shoppers with limited options, the research firm noted in its report. Samsung managed to secure the top spot with the biggest market share (20.2%), all thanks to its new line of fold smartphones. The company couldn't sell more units compared to the third quarter of 2020.
Apple Hopes To Make Strong Comeback
Apple managed to grab a quarterly market share of 14.2% after it launched the new iPhone lineup. Its new A15 chipset that improves battery and camera performance is said to be the main reason. Gartner also points out interest in 5G.
Previously, Apple revealed that its revenue grew in all product categories; however, these numbers failed to impress the investors, who were expecting even bigger gains. Apple's overall revenue grew by 29 percent to $83.36 billion, with the flagship iPhone witnessing 47 percent growth year-over-year at $38.87 billion.
CEO Tim Cook cited the global semiconductor shortage as the reason for underwhelming sales. He also blamed coronavirus-related manufacturing issues in Asia, which led the company to sell slightly below the target. Since the supply problems are going to get worse going forward, analysts believe Apple will certainly not be able to produce enough iPhones to meet the demands during the quarter.
After Smartphones, PCs To Face The Heat
Smartphones aren't the only tech still facing issues from the component shortage. Analysts suggest PCs will be hard to find coming holiday season due to supply chain problems. The market also reportedly saw a decline in the USS in Q3 2021 compared to Q3 2020. The demand for Chromebooks has also declined sharply as people have started returning to in-person learning and work.
Back in May, the research firm predicted that the global chip shortage would come to an end by the second quarter of 2022. But while devices are expected to be more readily available by that time arrives, Gartner noted that "substrate capacity constraints could potentially extend" into the fourth quarter of next year.