Persistent problems with the global supply chain and chip and component shortages led to a 6.7% decline in smartphone shipments in the third quarter, IDC reported.
The decline was especially poignant, given smartphones saw double digit growth in the first two quarters of 2021.
Analysts at IDC don’t believe supply-side problems facing smartphones will ease until well into next year.
Several auto manufacturers, including GM and Ford, also reported during third quarter earnings calls in recent days they saw steep declines in third quarter production and profits and expected problems to continue into 2022.
Susquehanna Financial Group recently reported that the wait time for chip deliveries to factories had grown from about 12 weeks before the pandemic to 22 weeks on average in October and even to 38 weeks for microcontrollers needed by the auto industry.
The decline for smartphones in the quarter was twice the IDC forecast of minus 2.9 % expected in a typically seasonally slow quarter. Vendors shipped 331 million smartphones in the quarter, compared to 355 million in the same quarter a year ago.
“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,” IDC research director Nabila Popal said. “In all honestly, it was never fully immune to the shortages…”
Across multiple industries, chip shortages have been compounded by shipping delays with a shortage of workers and truck drivers at ports. For smartphones, the industry has faced stricter testing and quarantine policies, but there are also power constraints on assembly plants and fabs in China that limit completion of components.
All the major smartphone vendors production targets for the fourth quarter have been adjusted downwards, IDC said. “With continued strong demand, we don’t anticipate the supply-side issues to ease until well into next year,” Popal said.
The severity of the shipment declines was greatest in central and eastern Europe, down 23% and Asia/Pacific with the exception of Japan and China, down 11%. The U.S. saw a small decline of less than 1%, however.
Samsung finished on top for the third quarter, with 69 million smartphones shipped, or nearly 21% of the market. Apple was second with 50 million shipped and 15% share, with Xiaomi third with 44 million, and 13% share. Both Samsung and Xiaomi saw declines year-over-year, while Apple saw a 20% increase.
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