APPLE STOCK

The production of smartphones in 2021 was severely affected by the lack of chips


A new market intelligence report says smartphone production in 2021 has been hit hard by global chip shortages, meaning growth will be significantly slower than expected.

IPhone production is far better than other brands, but it is still slowing down – with iPhone 13 cameras a special problem …

Background

Global chip shortages are caused by a combination of three factors. First, the sharp increase in demand for chips as a result of increasing use in the automotive sector. Second, the cessation of production caused by the pandemic. Third, it takes a long time to bring new chip production capacity to the grid, which means that chip manufacturers cannot quickly increase production to meet demand.

Apple’s expertise in purchasing power and supply chain means the company is able to negotiate priority inventories far in advance, isolating itself from multiple interruptions. However, the company warned investors that its own production is not immune, and that the first to be hit will be the Mac and iPad, and then the iPhone.

Yesterday, we saw examples of two sides of the equation, with Taiwanese camera component suppliers giving preference to Apple, while camera module assembly slowed in Vietnam. The camera components seem to prove a special challenge.

The production of smartphones in 2021 was hit hard

Counterpoint says things looked good at the beginning of the year, but not so much now.

The smartphone industry was on a strong recovery this year after COVID-19 hit the 2020 market hard. Smartphone retailers have placed large orders for components since late last year, and consumer demand due to the delayed purchase of a replacement boosted the market in the first quarter.

However, some original product manufacturers and smartphone suppliers report that they only received 80% of the required volume of key components in the second quarter of 2021, and the situation seems to be deteriorating as we move through the third quarter of 2021. Some smartphone manufacturers now say that they are only receiving 70% of their requests, creating more problems.

Counterpoint Research believes that 90% of the industry is affected, which will affect the forecast for the second half for 2021.

The company says the market continues to grow, but has downgraded its smartphone delivery forecast for 2021.

According to Counterpoint Research’s latest global quarterly shipment forecasts, total units delivered for 2021 are expected to grow by just 6% per year to 1.41 billion units; Counterpoint previously demanded annual growth of 9% to 1.45 billion units.

However, the blow to Apple is likely to be less severe than most of its competitors.

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Naveen Kumar

Friendly communicator. Music maven. Explorer. Pop culture trailblazer. Social media practitioner.

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