Smartphone industry to face supply chain disruption in 2022

The global smartphone industry will continue to be crippled next year by supply chain disruptions and component shortages, with the Omicron variant further compounding the situation, according to industry experts.

Following the below-expectations performance of the third quarter and persistent logistical challenges, International Data Corporation lowered its growth forecast for this year and by 5.3% and 3%, respectively from 7.4% and 3, 4%. .

There is also no short-term respite for the industry and the situation is not expected to improve until mid-2022, said Ramazan Yavuz, senior research director at IDC for the Middle East region and Africa. The National.

Concerns that Omicron’s latest variant could lead to further disruption in manufacturing and logistics “scenarios that point to the last quarter of 2022 to talk about an end to supply chain disruptions are gaining weight.” , said Yavuz.

Global smartphone sales or shipments are expected to reach 1.35 billion by the end of this year and just over 1.39 billion by the end of 2022, the Massachusetts-based researcher predicted.

“The smartphone industry will continue to overcome supply chain issues in the first half of next year. Industry-wide component shortages will prevent the market from achieving double-digit growth [in 2022]Said Edward Moya, senior market analyst for the Americas at New York-based Oanda. The National.

“The Omicron variant could [further] wreaking havoc on supply chain disruptions in the first quarter… the fight against Covid is not over and inflationary pressures could drive up prices for the industry, ”Mr. Moya said.

According to Gartner, global sales of smartphones to end users fell 6.8% between July and September, compared to the same period last year.

Component shortages disrupted production schedules, leading to lower inventory and delayed product availability, which ultimately impacted sales to end users, the technology consulting and research firm based in Connecticut.

“In 2022, we expect sales to improve, but it won’t really be double digits – probably around 8%… we could still be slightly behind in reaching that 2019 level. [pre-Covid levels]”said Anshul Gupta, senior manager at Gartner, The National.

Mr Gupta said that while the Covid-induced disruption has started to really normalize on both fronts – chip-related shortages and supply constraints – but the situation is far from resolved.

“We anticipate that the situation regarding some of the key components, in particular the chipsets, will probably continue until the second quarter of next year,” he added.

In the third quarter of this year, Samsung maintained its lead in smartphone sales, although its overall market share fell 1.9% on an annual basis.

The South Korean brand sold more than 69 million smartphones in the third quarter, capturing a 20.2% market share. Its sales fell more than 14.6% on an annual basis.

Second-place Cupertino-based iPhone maker Apple saw sales increase 19.3% annually to more than 48.4 million units. It took 14.2 percent of the market share.

The American company was followed by Chinese electronics maker Xiaomi which controlled 13% of the market share, selling more than 44.4 million smartphones in three months as of September 30.

The shortage of components is expected to affect those that are more “heavily focused” on 4G devices than 5G, experts said.

“The general state of access to critical components varies between brands of smartphones. Some budget phone manufacturers have relatively better access to supplies, and they will be less affected compared to competitors, even in the same segments, ”Yavuz said.

High-end brands will also face challenges related to component shortages and logistics, according to Yavuz. However, “declining consumer confidence due to mounting inflationary pressures” and improving the mid-range phone lineup are the main challenges that high-end phone makers could face next year, did he declare.

However, Mr Moya predicted that 2022 will be the year of budget phones as more consumers shy away from high-end phones. Apple, however, could gain market share due to the high popularity of iPhones among users, he added.

Still, it’s hard to predict, Mr. Gupta said.

“It’s quite complex on a global scale,” he added.

The Motorola Razr smartphone from Lenovo Group Ltd.  is shown at an event in Los Angeles, California, United States, Tuesday, November 13, 2019. Motorola is bringing the Razr flip phone back 15 years after its debut, restarting it as a foldable smartphone as part of a return to the premium segment which would again pit the company against Apple and Samsung.  Photographer: Patrick T. Fallon / Bloomberg

“When we look at countries like China, the United States or some in Europe … smartphone penetration is almost between 80 and 98% and 5G is already deployed … in these markets, it will certainly be the gain for manufacturers of high-end smartphones and 5G will be the key.

“However, for other markets, for example Latin America, Africa or emerging Asia-Pacific… 5G may not be present in all markets. For example India is a big market but the 5G hasn’t been auctioned yet. So I’d say in those markets it’s going to be a mix of basic smartphones that will cost between $ 150 and $ 300, including low-end phones closer to $ 100 ” , added Gupta.

Foldable smartphone technology will also help the industry grow in 2022 and beyond, experts said. Their shipments will increase nearly three times on an annual basis to reach around 9 million units this year, with Samsung accounting for 88% of the market share, according to Hong Kong-based Counterpoint Research.

By 2023, shipments of foldable smartphones are expected to increase tenfold. Samsung will continue to lead the industry with around 75 percent of the market share, the market research company said.

Companies such as Huawei, Lenovo and Motorola also sell their own models of foldable phones, while Apple is expected to launch its first foldable phone in 2023. It has developed prototypes of foldable screens for internal testing, but has not confirmed its intention to release a foldable iPhone. again.

Update: December 25, 2021, 5:30 a.m.

Source link

About Bob C. Zoller

Check Also

Supply chain issues causing major delays for machine shops

If you need repairs on your car, be prepared to pay more and wait longer. …