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Components shortage sends smartphone market into decline

Components shortage sends smartphone market into decline

 November 24, 2021 at 8:43 am   |     Author:   |     Technology  

Samsung Galaxy Z Fold3 5G standing folded on table
Enlarge / Foldable devices like the Galaxy Z Fold3 5G (above) helped Samsung keep its top spot.

Component shortages have been wreaking havoc on the tech industry since the onset of the COVID-19 pandemic, and smartphones are no outlier. Decelerated production schedules have given way to smaller stock and delayed launches. All of this has resulted in a decline in smartphone sales in Q3 of 2021 compared to Q3 2020, Gartner reported today.

According to numbers the research firm shared today, sales to consumers dropped 6.8 percent. A deficit in parts like integrated circuits for power management and radio frequency has hurt smartphone production worldwide.

“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 accompanying the announcement.

The analyst added that the production schedules of “basic and utility” phones were more affected by supply constraints than “premium” ones. As a result, premium smartphone sales actually increased during this time period, even though smartphone sales overall declined.

Samsung on top

Still, shoppers were left with limited options, Gartner noted. Samsung ended up winning the greatest market share (20.2 percent), thanks to its foldable smartphones.

Apple’s quarterly market share (14.2 percent) was aided by new features in its iPhones, namely the A15 processor and improvements to battery life and the camera sensor. Gartner also pointed to interest in 5G.

Smartphones aren’t the only tech still suffering from the component shortage. Analysts are expecting PCs to be hard to find this holiday season due to supply-chain issues. The market also reportedly declined in the US in Q3 2021 compared to Q3 2020. And Chromebook demand has declined sharply as people return to in-person learning and work.

In May, Gartner predicted that the global chip crisis would end by Q2 2022. But while devices are expected to be more readily available at that time, the research firm noted that “substrate capacity constraints could potentially extend” into Q4 2022.

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