Chip shortage causes smartphone sales to fall 6.8%

In a nutshell: Global smartphone sales fell 6.8% in the third quarter of the year, but the decline was not due to declining demand: blame the chip crisis. However, it was a positive 3rd quarter for Apple, which has moved ahead of Xiaomi to take the second largest market share after leading Samsung.

The data comes from Gartner’s latest market intelligence report. The research firm notes that the depressingly well-known problem of chip shortages has caused smartphone sales to end users to fall 6.8% year-on-year.

“Despite strong consumer demand, smartphone sales fell due to delayed product launches, longer delivery schedule and insufficient inventory on the channel,” said Anshul Gupta, senior research director at Gartner. “Supply constraints affected the production schedule of basic and utility smartphones much more than premium smartphones.”

Gartner specifies integrated radio frequency and power management circuits as short-supply components that delayed production and affected sales. However, there was good news for the phone companies as premium phones grew in popularity during the quarter despite overall sales declining.

Looking at the top five, Samsung maintained its position as number one with 69 million sales despite the market share falling by 1.9% year / year. The Korean company was helped by high demand for their Galaxy Z Fold 3 and Galaxy Z Flip 3 devices.

Apple (48 million) was slightly ahead of Xiaomi (44 million). Gartner writes that upgrades to the iPhone 13 series, such as the bionic A15 sensor and camera, combined with Apple’s trade-in applications, helped boost sales. Xiaomi, meanwhile, continued its expansion in Europe and the Middle East.

Fourth place Vivo experienced the largest annual growth with an increase of 20.9% to 36 million. The third Chinese producer on the list, OPPO, took the fifth position with 33 million sales.

While last year’s lockdowns gave smartphone sales a boost, most of the decline in the third quarter of 2021 can be attributed to the chip crisis, which is affecting virtually every electronic consumer product (and vehicle) out there, from increasingly expensive graphics cards to consoles. It has even led some manufacturers to sell gaming PCs without dedicated GPUs.

Image credit: bodnar.photo

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