Smartphone vendors unable to meet demand due to the impact of the chip crisis

Semiconductor shortage has started to spread its wings to the global smartphone market and vendors are currently struggling to meet the demand. Samsung was the leading vendor with a 23% share and last year Xiaomi was in 2nd place however, this year Apple grabbed it thanks to strong demand for the iPhone 13.

After the launch of the new iPhone, Xiaomi now stands at 3rd with a market share of 14%. The 4th and 5th rankings are currently held by Vivo and OPPO, both with a 10% share each.

Ben Stanton, Canalys Principal Analyst remarks that 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.”

Many analysts and industry experts believe that the chip shortage will likely continue well into 2022 despite the measures taken by man chip manufacturers. And when this problem is combined with the high global freight costs, it will push the device retail pricing even higher.

Along with this, the chip shortage is also prompting last-minute changes about device specification and order quantities from the smartphone vendor end. This causes confusion and inefficiency when communicating with retail and distributor channels. Man on the distribution channels are now nervous as important sales holidays, such as Singles’ Day in China, and Black Friday in the west is approaching closer.

Smartphone channel supplies are already low, and as more customers anticipate similar sales cycles, the surge of demand will be impossible to meet by the vendors. And the impact of these will be seen in customers not receiving aggressive smartphone discounts this year.


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