Smartphone Price Observations for 2021 and Outlook for 2022


Global inflation of goods due to supply chain issues, rising energy prices, labor shortages and higher input costs has also made an impact on the handset market and will continue to keep prices inflated through 2022. In 2021, smartphone prices spiked globally but the inflation will be felt differently in various regions across the world.

North America
  • 10% YoY ASP increase in first three quarters of 2021 due to increased shipping and component costs.
  • Pre-paid segment experiencing more shortages as OEMs place more importance of producing high-end models.
Latin America
  • 4.7% YoY ASP increase in first three quarters of 2021, region seeing the worst inflation in 15 years.
  • Local currency depreciation having a significant impact on ASPs, Samsung being the only OEM to sell devices in local currency giving them a competitive advantage.
  • 70% of customers need a payment plan in order to afford a smartphone, this is leading retailers to incorporate ‘hidden inflation’ in customers payment plans.

Southeast Asia
  • 2.0% YoY ASP increase in first three quarters of 2021, smallest amount of inflation compared to other regions and not expected to change much in 2022.
  • OEMs are keeping prices as low as they can and will continue to do so, unless other macro factors like COVID-19 ramps up again in this region, that may affect ASPs in 202 depending on the impact on current supply chains.
Middle East and Africa
  • 17.4% YoY ASP increase in first three quarters of 2021, the highest inflation globally at close to 8% as foreign exchange rates drop due to pandemic impacts on some key markets.
  • Supply disruptions for major Android vendors caused an impact on the distributers bottom line that forced these OEMs to pass the cost onto the customers.
  • Lowest price ranged devices felt the most impact of inflation, as OEMs are once again placing more importance on the supply of higher-priced handsets. This is causing customers with lower income hesitant on buying the latest phones.
  • There is also the expectation of more VAT or higher import taxes on handsets in the near future due to government policies to combat depreciating domestic currencies.
  • 10.2% YoY ASP increase in first three quarters of 2021 due to shortages and supply issues as well but there was a GST hike in India during 2021 that added to the price of handsets in India.
  • OEMs are developing ‘creative pricing’ to hide the price increases by device as a newer version without upgrading specs and then selling at a higher price point.
Smartphone Chipset Observations and 2022 Outlook

Wafer prices at matured nodes have increased by 25%-40% between 2020 and now, likely to rise another 10%-20% in 2022. Advanced/leading edge nodes are not expected to rise since companies like TSMC and Samsung and more focused on cost-down execution to maintain profitability.

TMSC announced it will raise wafer prices from the beginning of 2022, this strategy implying a stronger demand going forward with tight supply lasting for the next few quarters. Smartphone OEMs will suffer the most on profit if they cannot balance the prices of handsets to customers. 5G growth may slow down in 2022 while the low-end and mid-end markets will face more difficulty as priority will be put onto high-priced smartphones that bring in a higher profit margin.

OEMs have been reluctant in 2021 to increase prices significantly with the fear of losing market share, so other strategies will be taken in 2022 to maintain costs. OEMs now must get creative in where to offset the cost of more expensive components. Xiaomi, for example, has taken steps to reduce the promotions on their handset devices to combat the increased prices of components. Some OEMs may have been prepared by stockpiling components at the beginning of the pandemic to offset the price increase. Many handset OEMs were not prepared in that sense, so the plans have been turned to reducing the Bill of Materials (BoM) costs in 2022 to offset the higher component cost and additional inflation.


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