Supply chains, chip shortages, stagflation threaten electronics market in 2022
Newspaper Title: https://dailynewsegypt.com/
Newspaper Number:
Monday - 25 October 2021
any crises hit the global economy after the coronavirus pandemic, and all of these have negatively impacted the technology and electronics industry. These crises impacted consumer technology, like computers and phones, and digital tools that are part of industries.
Currently, the electronics market is dealing with the supply chain crisis, the energy crisis, and the recent “stagflation” crisis.
The Egyptian market is not isolated from what is happening globally. All markets affect each other, but the situation in the Middle East and Egypt markets remains relatively better than it is in Europe, the Americas and Asia.
There are many speculations about a possible increase in the prices of mobile phones and smart devices early next year.
How will the Egyptian market be affected by these crises? Does this mean that now is the time to make a decision and buy an electronic device you have been hesitant about?
Hisham Abdel Ghaffar, CEO and founder of MenaGurus company, said that the entire world is suffering from an inflationary stagnation crisis as well as the two crises of supply chains and energy.
The stagflation crisis is summarized in the rise in commodity prices due to energy and supply chain problems as well as the lack of demand, due to the negative impact of the pandemic, which may indirectly affect the technology market in Egypt.
He explained that the prices of devices will increase during the coming period due to the lack of manufacturing components as well as energy problems.
The effects of the stagflation crisis are expected to be seen at the end of this year. The proof is the price of the iPhone 13 whose price hiked to approximately EGP 30,000, which is more expensive than its price last year by nearly EGP 5,000.
Abdelghaffar added that now is the time that Egyptian consumers buy the electronic devices they have been considering because the market is expected to witness an increase in prices by the end of this year or early next year.
Mohamed El-Mahdy, a major mobile phone dealer in the Egyptian market, said that this year the prices of mobile phones and their availability were not impacted by the shortage of chips and the supply chains crisis due to the slowdown in sales on a local level.
He added that it is expected, according to market developments, that the market will witness a rise in phone prices next year, affected by the increase in shipping prices. The increase may go up to 20%.
Karim Ghoneim, Head of the Digital Economy Division at the Cairo Chamber of Commerce, said that the global market suffers from several crises. This includes the high shipping prices and difficulty finding an opportunity for shipping, due to the crisis in Europe and America, which suffer from the accumulation of goods in ports and their inability to unload and transport them.
The global crisis may cast a shadow over the Egyptian market during the coming period, especially in terms of product prices and shipping from manufacturing countries to the local market.
But so far, the mobile phone market has not been affected by these crises and is expected to achieve a growth of 8% by the end of 2021.
For his part, Hisham Moharram, Marketing Manager and official Spokesperson of Realme Egypt, said that the smartphone industry was affected over the past period due to the supply chain crisis as well as electronic chips. He added that, however, recently, this crisis has improved a lot, especially that most companies, including Realme, turned to 5G processors, which contributed to improving the situation.
“Over the upcoming period, the majority of phones in the market will come with 5G processers. Moreover, we will be launching a new 5G device technology before the end of this year,” he continued.
He explained that the overall performance of the market this year was good and achieved good growth rates, but new challenges may arise next year.
The results of data released by the China Academy for Information and Communications Technology (CAICT) showed that shipments of 5G phones in China increased by 70.4% Y-o-Y to about 183 million units, during the first nine months of 2021.
The academy, a research institution operating under the Ministry of Industry and Information Technology, said that the shipment volumes represented 73.8% of the country’s total mobile phone shipments during the aforementioned period.
Between January and September, a total of 172 new models of 5G mobile phones were released, representing 48.6% of all newly released mobile models.
In September alone, China shipped about 15.12 million units of 5G phones, an increase of 8.1% year on year, according to the data released.
