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Gartner: Global smartphone market impacted by supply chain disruption

Component shortages disrupted production schedules, leading to lower inventory and delayed product availability, which eventually impacted sales to end-users.
“Despite strong consumer demand, smartphone sales declined due to delayed product launches, longer delivery schedule and insufficient inventory at the channel,” says Gartner senior research director, Anshul Gupta.
“Supply constraints impacted the production schedule of basic and utility smartphones much more than premium smartphones.”
The current shortage of components, such as radiofrequency and power management integrated circuits, delayed smartphone production globally. This disrupted the supply-demand equilibrium, and end-users were burdened with limited choices at the point of sale. Sales of premium smartphones continued to grow, even though overall smartphones sales declined in the quarter.
According to the Gartner research, Apple reclaimed the No.2 position in sales to end-users, and Xiaomi moved back to No.3 in the third quarter of 2021. Samsung maintained its overall lead in smartphone sales, though its market share declined 1.9% year-over-year.
Even with the overall decline, Samsung experienced growth of its premium smartphones, led by strong demand for revamped foldable smartphones. Chinese smartphone vendors Xiaomi, Vivo, and OPPO increased their market share by 1%, 2.4%, and 1.7%, respectively.
Apple continued to experience strong demand for iPhones led by compelling feature upgrades, and an under penetrated 5G installed base. Upgraded bionic A15 sensor, improved battery life and camera sensor optimisation for improved photography are the leading features that drove iPhone upgrades. Apple continues to revamp its online channel and position trade-in programs to accelerate demand for its 5G iPhones through the rest of 2021.
Xiaomi's strong online channel-led strategy for market expansion in Europe and the Middle East and partnering with communication service providers (CSPs) in these regions helped the company increase its global smartphone market share in the third quarter of 2021.
Vivo registered the highest year-over-year growth (20.9%) among the top five global smartphone vendors in the third quarter of 2021. The company introduced 13 new smartphones in the quarter to gain an advantage while entering new markets, including Europe and the Middle East, along with new offline retailers and experience stores to its strategy.
Meanwhile, Gartner is forecasting worldwide AI software revenue to total US$62.5 billion in 2022, an increase of 21.3% from 2021.
“The AI software market is picking up speed, but its long-term trajectory will depend on enterprises advancing their AI maturity,” says Gartner senior research director, Alys Woodward.
"The AI software market encompasses applications with AI embedded in them, such as computer vision software and software used to build AI systems. Gartner's AI software forecast is based on use cases, measuring the amount of potential business value, timing of business value and risk to project how use cases will grow."

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