Crippling component shortages caused smartphone shipments to dip in calendar Q3, though it was the also-rans, vendors outside of the top five biggest brands with the lowest economies of scale, that suffered most.
Preliminary results from Canalys show the market declined 6 per cent year-on-year. The analyst was not yet ready to make public the absolute shipment figures but a year ago sales into the channel were 348 million, so they look 20.9 million units lighter.
“The chipset famine has truly arrived,” said Ben Stanton, principal analyst. “On the supply side, chipset manufacturers are increasing prices to disincentivize over-ordering, in an attempt to close the gap between supply and demand. But despite this, shortages will last until well into 2022.”
Rising costs of global freight are adding to the chipset shortfall, and “smartphone brands have reluctantly pushed up device retail pricing.”
Leader of the pack Samsung’s total share of the spoils was unchanged at 23 per cent, which indicates its sales to retailers and distributors declined at around the market average.
Apple snuck into second place with 15 per cent market share, up from 12 per cent a year ago. This was “thanks to strong early demand for iPhone 13,” said Canalys. The Reg reported this week that Apple’s supply chain may make 10 million fewer-than-forecast iPhone 13 models this year due to chip supplies.
Xiaomi, pushed into third place, retained market share of 14 per cent, while fellow Chinese handset brands Vivo and OPPO took their share to 10 per cent each from the 9 per cent they both held in Q3 2020.
The smartphone brands outside of the top five biggest sellers tend to suffer more when macro economic trends – such as shortages – emerge, Stanton told us, largely because they don’t have the same purchasing muscle.
He said at a local level vendors are being forced to “implement last-minute changes in device specification and order quantities,” saying it was vital they do this to “maximise volume capacity.”
However, “unfortunately it does lead to confusion and inefficiency when communicating with retail and distributor channels,” he added. “Many channels are nervous heading into important sales holidays.”
“Channel inventories of smartphones are already running low, and as more customers start to anticipate these sales cycles, the impending wave of demand will be impossible to fulfil,” Stanton said.
TSMC said yesterday it expects chip supplies to be low throughout 2022 and is concerned that overproduction could cause prices to tumble in an industry correction.
Oh the joys of forecasting. ®