Smartphone Shipments Fell by 6% in Q3 2021 Due to Component Shortages

The worldwide chip shortage has impacted almost every industry that relies on computer components, including smartphone makers.

According to Canalys, Global smartphone sales decreased 6% in the third quarter of 2021, as suppliers battled to satisfy demand due to component shortages. Samsung was the most notable seller, accounting for 23% of the market in Q3 2021, same as Q3 2020.

Thanks to high early demand for the iPhone 13, Apple reclaimed the second position with a 15% market share, compared to 12% in Q3 2020. Xiaomi came in the third position with a 14% market share – same as 14% in Q3 2020, while Vivo and OPPO rounded out the top five with a 10% market share each, same as their performance in Q3 2020.

Canalys Principal Analyst, Ben Stanton said, “The chipset famine has truly arrived. The smartphone industry is striving to maximize production of devices as best it can.

“On the supply side, chipset manufacturers are increasing prices to disincentivize over-ordering, in an attempt to close the gap between demand and supply.

“But despite this, shortages will not ease until well into 2022. As a result of this, as well as high costs of global freight, smartphone brands have reluctantly pushed up device retail pricing.”

He also mentioned that smartphone vendors are having to make last-minute modifications to product specifications and purchase quantities on a local level.

While it is important for them to do so and optimize volume capacity, it does result in confusion and inefficiencies when interacting with retail and distribution channels.

“Customers should expect smartphone discounting this year to be less aggressive. But to avoid customer disappointment, smartphone brands which are constrained on margin should look to bundle other devices, such as wearables and IoT, to create good incentives for customers,” Stanton added.