Maksym Yemelyanov - Fotolia
Flash memory and OLED shortages will hit smartphone sales
Analysts at Gartner have warned that a components shortage will affect sales of high-end smartphones
Demand for 4G-enabled smartphones in fast-growing markets such as China and India again spurred global smartphone sales to new heights during the second quarter of 2017, but a looming issue with the supply of critical components may be about to knock the industry back, according to Gartner.
Concerns about the rising costs of smartphone components thanks to greater demand and limited supply will cause problems during the second half of 2017, the analyst firm reported, particularly when it comes to availability of premium devices.
“We expect that a shortage of flash memory and OLED [organic light-emitting diode] displays will affect premium smartphone supply in the second half of 2017,” said research director Anshul Gupta.
“We have already seen Huawei’s P10 suffer from a flash memory shortage, and smaller, traditional brands, such as HTC, LG and Sony, are stuck between aggressive Chinese brands and the dominating market shares of Samsung and Apple in the premium smartphone segment.”
Worldwide sales of smartphones to end-users totalled 366.2 million units in the second quarter to 30 June 2017, up 6.7% year on year. Android accounted for 87.7% of this market, with iOS accounting for 12.1%.
“Although demand for utility smartphones remains strong, there is growing demand in emerging markets for 4G smartphones, with more storage, better processors and more advanced cameras,” said Gupta. “This is translating into higher demand for mid-priced [$150 to $200] smartphones.”
Samsung’s sales grew by 7.5% to 82.5 million units over the same period, reversing three consecutive quarterly declines – thanks in part to a spate of fires that hit its Galaxy Note 7 line last year. Gartner reported that the Galaxy S8 and Galaxy S8+ were helping to revive the brand, despite growing competition from Chinese brands such as Huawei, Oppo and Vivo.
Read more about smartphones
- The amount of contactless payments made through mobile devices increased by 336% compared with 2016, According to figures from Worldpay.
- Analysis of 100,000 corporate devices shows more than a quarter of traffic going to phishing domains was from gaming apps.
These three brands accounted for a little over 23% of the global market, compared with 18% a year ago, with Huawei shipping 36 million devices and accounting for 9.8% of the market.
Apple, meanwhile, occupied second place in the market, shipping 44.3 million devices, roughly flat compared with this time last year, but Gupta said he expected this to pick up later in the year, with more sales likely to be fuelled by anticipated iOS 11 features such as augmented reality, machine learning and an improved Siri.
China and other emerging markets in the Asia-Pacific region – particularly Indonesia – now account for half of all smartphone sales between them, although sales into China actually declined a little as the growing popularity of premium devices caused consumer buying cycles to lengthen. Meanwhile, sales in Western Europe saw a return to growth, thanks to strong offerings from Huawei and Samsung in the region.