A report from International Data Corporation indicates that a deepening memory component shortage will lead to smartphone manufacturers facing bankruptcy and record-high prices this year.
According to a report by International Data Corporation (IDC), the ongoing shortage of memory components is expected to drive some smartphone manufacturers to bankruptcy and push smartphone prices to record highs. The issue is described as a 'tsunami' impacting the supply chain of memory components, which is affecting the entire consumer electronics industry. Francisco Jeronimo, an expert at IDC, emphasized that this situation is not merely a temporary tightening but a significant shock originating from the memory supply chain.
The report forecasts an increase in the average selling price of smartphones by 14% this year, reaching a record $523. As a consequence of this shortage, manufacturers will no longer be able to produce smartphones priced under $100. This change poses a significant challenge for the budget smartphone segment, which has been crucial for emerging markets like India and Africa. The inability to provide affordable devices may disrupt the growth of smartphone penetration in these regions, which rely heavily on budget offerings.
IDC's predictions suggest a substantial decline in smartphone sales amid rising prices, which may lead to a shift in consumer purchasing behavior and potentially hurt the overall market in the long term. As manufacturers grapple with these mounting challenges, the question remains on how consumer preferences and market strategies will adapt to this new landscape resulting from the booming AI influence and supply chain disruptions.
