The chip shortage has been felt in the automotive, personal computer and home-appliance industries. However, the phone industry had largely avoided this shortage. The WSJ reported that while phone manufacturers typically purchase supplies half a year in advance, they are now running low on stockpiles.
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Samsung Electronics experienced a 20% drop in shipments after having problems sourcing key parts, reports WSJ, and Google announced its Pixel 5a 5G device would be available only in the U.S. and Japan. Last March, China’s Xiaomi released its Redmi Note 10 in India at $161 per device; the phone now retails at $174, about 8% higher than the original price. Xiaomi also released the Mi 11 Ultra in India in April, but sales were delayed.
Chip shortages are also resulting in higher component prices, which are raising the prices of smartphone devices. The average wholesale price for phones worldwide went up 5% in the second quarter, according to market researcher Strategy Analytics and as reported by WSJ. Before that, prices didn’t increase by more than 2%.
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There have also been additional delays across the industry due to the impact of the pandemic on consumer spending and its effect on production in India and Vietnam, WSJ added. Zhengzhou, China, home to the world’s largest iPhone assembly plant, has also been experiencing heavy rains and flooding. Foxconn, the assembly plant for Apple’s iPhones, said on Wednesday that its factory had not been impacted by major flooding in the city, reports CNBC.