Mobile Devices

Chip shortage causes smartphone shipment decline

03 November 2021
Samsung led the market for smartphones in the third quarter and Apple reclaimed the second-place position. Source: IDC

For the first half of 2021, the smartphone market was booming with double-digit quarterly growth. That all changed in the third quarter as worldwide smartphone shipments dropped 6.7% year-over-year, according to new research from International Data Corp. (IDC).

Shipments totaled 331.2 million units during the quarter. While a slight decline was expected due to seasonality, the decline was twice the forecast of negative 2.9% growth. The large decline was due to the supply chain constraints currently impacting the semiconductor industry with chips being hard to come by in some segments, IDC said.

"The supply chain and component shortage issues have finally caught up to the smartphone market, which until now seemed almost immune to this issue despite its adverse impact on many other adjacent industries," said Nabila Popal, research director at IDC. "In all honestly, it was never fully immune to the shortages, but until recently the shortages were not severe enough to cause a decline in shipments and was simply limiting the rate of growth. However, the issues have now compounded, and shortages are affecting all vendors alike.”

Additionally, the industry has been hit with manufacturing and logistical challenges with stricter testing and quarantining policies that have delayed transportation and power supply constraints in China restricting manufacturing of components, Popal said.

On top of component shortages, the industry has also been hit with other manufacturing and logistical challenges. Stricter testing and quarantining policies are delaying transportation and power supply constraints in China are restricting manufacturing of key components.

“Despite all efforts to mitigate the impact, all major vendors' production targets for the fourth quarter have been adjusted downwards,” Popal said. “With continued strong demand, we don't anticipate the supply-side issues to ease until well into next year."

Leaders in the quarter

Samsung finished the quarter in the top position with 69.0 million units shipped, resulting in a 20.8% market share. This was a year-over-year decline of 14.2% due to supply constraints. Apple was second overall with 50.4 million units shipped for 15.2% market share. Apple grew 20.8% year-over-year growth. IDC said.

Xiaomi had a decline of 4.6% in the third quarter after double-digit growth in the previous four quarters. The company was third overall with 13.4% share and shipments of 44.3 million units. Vivo and Oppo came in fourth and fifth with shipments of 33.3 million and 33.2 million units, respectively. This equated to market shares of 10.1% and 10.0% and growth of 5.8% and 8.6%, respectively.

The full research can be found in IDC’s Worldwide Quarterly Mobile Phone Tracker.

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