⚡ Welcome to The Weekly Authority, the Android Authority newsletter that breaks down the top Android and tech news from the week. The 195th edition here, with Qualcomm’s Snapdragon 8 Plus Gen 1, Pixel Watch specs, Huawei’s Mate XS2 global launch, and Rockstar’s upcoming Red Dead Redemption remake/remaster.
We spoke last week about Samsung prepping huge price hikes on components due to the chip shortage, which will likely mean your next electronic device will be more expensive. This got us thinking — just how much have component prices risen lately, and how has the pandemic affected production and prices?
- According to the Institute for Supply Management, semiconductors are predicted to remain scarce through 2023, which could mean further price hikes on our electronics.
- And industry sources say chip prices increased between 10% and 40% in 2021 — market intelligence platform Supplyframe’s Q3 Commodity Intelligence Quarterly report revealed component price hikes as high as 40% compared to the previous quarter, due to increases in manufacturer input costs, labor costs, and logistics costs to move products globally. Not to mention the pandemic and the ongoing conflict in Ukraine causing supply chain issues.
- We’ve already seen Xiaomi’s global shipments of smartphones slump 17.8% last quarter, mirroring falls by Oppo and Vivo — check out Tristan’s dive into smartphone sales in Friday’s Daily Authority for more on this,
The global impact of China’s zero-covid policy
For some of us, it may feel like the pandemic is over, but that’s far from the truth, with its impact still being felt worldwide, China’s zero-covid policy has led to strict lockdowns in many of its major cities, with a global impact on the manufacturing and supply of electronic goods.
- China produces over one-third of the world’s electronic goods.
- From 2020-2021, the UK imported £7.3bn of telecoms and sound equipment from China
- And 24% of all machines and electrical products in the US are imported from China.
- Shanghai produces around one-third of all China’s computer chips.
- Earlier this month, several companies supplying components for Apple, including Pegatron, Compal Electronics, and Quanta Group, had to close their factories in Shanghai due to lockdown.
- According to an analyst at investment firm Wedbush Securities, the production of three million iPhones had already been affected in April 2022, “with more to come if this continues.” Production of iPads and MacBooks may also be affected.
- And fewer goods being manufactured means fewer goods traveling through Shanghai’s port: As of May 2, the port reported handling 23% less volume than on March 12, prior to the lockdown.
Even once the lockdown in China ends, the sudden surge of shipments could overwhelm US ports, which could mean weeks or even months of delays, adding to rising inflation.
Price hikes for consumers
It seems price hikes are inevitable, fuelled largely by the Chinese lockdown and the rising cost of components caused by the chip shortage. We’re already seeing devices launch with a higher-than-expected price, like the global launch of the Huawei Mate XS2 this week, which will cost you €1,999 (about $2,100) when it hits markets in Europe in June.
But if you’re losing sleep over price hikes and chip shortages, spare a thought for those looking to get their hands on IBM’s first electronic computer, the Model 701.
- Announced this week in 1952 (May 21), the device signaled IBM’s move into the computer business.
- But to rent one of these computers would have cost you a whopping $12,000 a month — around $117,000 today.
So I guess things aren’t really that bad?
- May 24: Xiaomi Mi Band 7 launch (China)
- May 24-27: Computex Taipei
- June 3: The Boys season 3 hits Amazon Prime Video
- June 6-10: Apple WWDC 2022
- June 10: The Quarry released on PC, PS5, PS4, Xbox Series X, Xbox One
- June 10: Jurassic World Dominion in theaters
- June 12: Xbox and Bethesda Games Showcase @ 12 PM CT
- June 20-23: Collision (Toronto)
- June 26-July 3: Summer Games Done Quick
Tech Tweet of the Week