Mobile vendors grapple with shortages

Caroline Gabriel/Rethink Wireless
10 Dec 2010

The mobile industry is still in the grip of component shortages, both in devices and infrastructure.

The big three European base station makers all cited shortages in their third quarter results and many key handsets, such as the HTC Desire and iPhone 4, have also suffered from scarcity of key elements such as touchscreens.

Ericsson's chairman, Michael Treschow, has confirmed that the company is still being hit by shortages, saying the situation is “improving, but we're not completely out of it.” In Q3, the company said it was finding it tough to meet demand for its 3G and LTE kit because of problems procuring some key components, especially base station semiconductors.

“A key priority has been to mitigate the effects of industry-wide component shortages,” CEO Hans Vestberg said. “The situation has gradually improved during the quarter but it remains a challenge to fully meet the demand for mobile broadband.”

Ericsson said supply shortages reduced Q3 sales by between 2-3 billion Swedish kronor ($285m-$428m), though this was less dramatic than the 3-4 billion kronor impact in the second quarter. It is not clear what the Q4 effect will be, but the problem will clearly not go away until the middle of 2011.

On the client side, smartphone manufacturers are experiencing similar shortages, particularly in touchscreens and printed circuit boards. Acer's mobile chief, Aymar de Lencquesaing, recently told Reuters that “The industry as a whole is struggling with supply. It is a bit of a scramble.”

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