Mobile Phone Prices Are Predicted To Rise, This Is The Cause

Smartphone prices are predicted to rise (TheVerge)

JAKARTA – In the midst of decreasing global chip supply, mobile phone manufacturers continue to produce new devices that are attractive to consumers. They are required to continue to buy the latest smartphones that are equipped with various advanced features. However, observers say that the price of mobile phones will skyrocket this year.

The world's reduced supply of chips is a serious obstacle for global smartphone manufacturers. The reason is that when chips are getting scarcer, the price of cellphones is predicted to increase quite high.

"The possible outcome here is higher phone prices and deeper shortages for certain models," said O'Donnell, a researcher from Forrester as quoted by CNBC International.

O'Donnell said a number of the world's major mobile phone manufacturers would experience difficulties due to the shortage of chip supplies. He said Samsung, LG, Huawei, and Xiaomi would have difficulties.

“In Apple's case, you might be able to get a high-end iPhone 12, but not a lower-end iPhone XS. Other smartphone makers like Samsung, LG, and Chinese brands like Xiaomi and Huawei will all find it difficult,” said O'Donnell.

Some time ago Apple's CEO, Tim Cook, said that his party was having difficulties in producing the iPhone and iPad due to the reduced global supply of chips.

"The drawback is not in the high-powered processors that Apple manufactures for its devices, but the chips for everyday functions like turning on the phone screen and decoding audio," Cook said.

HMD, the company that produces Nokia phones, said that this would be a big challenge for a number of high-end device manufacturers who produce fewer devices.

“We see there must be overall tightness in the supply chain,” said HMD CEO Florian Seiche. "We may see a certain imbalance in the market."

Currently mobile phone manufacturers have to compete with automotive manufacturers to get the chips they need. The two sectors must compete for semiconductors.

“Now that the automotive and other sectors are catching up and starting to reclaim the capacity they have left behind, there is intense competition for semiconductor supply. This has depressed the supply of smartphone chips,” said Accenture semiconductor analyst Syed Alam.