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Global smartphone market to grow by 12% in 2021, claims report – Times of India

June 14, 2021

The global smartphone market is expected to grow by 12% in 2021, despite the industry facing a shortage of chipsets.
“Backorders are building,” said Canalys Research Manager Ben Stanton. “The industry is fighting for semiconductors, and every brand will feel the pinch,” he added.
Despite this, however, the report suggests that the global smartphone shipments are expected to reach 1.4 billion units this year.
According to the report, smartphone brands will first prioritise regionally and focus on the flow of units into lucrative developed markets such as China, the US and Western Europe at the expense of Latin America and Africa.
“But even in these better-served regions, they will still be constrained, and will then turn to channel prioritisation, pushing a greater allocation of units into fast-activation channels, such as carriers, and fewer into distribution and the open market. This will have interesting side-effects and may open doors for challenger brands to gain share in key open market channels if the incumbents are unable to fulfil” said the report.
The report also adds that smartphone makers will also be posed with a choice to either absorb the rising cost as price of key components — chipsets, memory — or pass it on to the customers.
“Smartphone vendors must look at improving their operational efficiency while lowering margin expectations in their low-end portfolios for the duration of the constraints, or risk hemorrhaging market share to their competitors,” added the report.
The report also sheds some light now on how the advent of the pandemic has permanently reshaped that channel for smartphone brands.
“Channels had to transform or die during the pandemic, and this forced innovation” added Stanton. “Developed countries have seen an online surge, which has forced retailers to reassess their offline footprints. As a result, many stores will close this year, and for those that stay open, their purpose will be reimagined for customer support and order fulfilment, as customers increasingly use multiple channels during the purchase process. Innovations driven by COVID-19, such as unified stock and delivery to car, are helping shift retailers toward their consolidated omnichannel vision. And centralized procurement will also give the channel more negotiating power with smartphone brands and may cause some retailers to attempt to bypass distribution to build new direct relationships. The new normal for the smartphone industry is as ruthless and competitive as the old one.”

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