The crisis caused by the shortage of elements from suppliers is slowing down the release of new technological devices and this could lead manufacturers to review their launch and sales strategies. A consequence that would lengthen the months between the releases of new smartphone and computer models, easing the consumer frenzy in favor of more relaxed times for the supply chain and less demand for rare earth materials. Since the beginning of summer 2020, the first concerns of the supply chain had turned the spotlight on the risk that, sooner or later, the supply of certain product categories would not meet demand.
Remember the PS5 and Xbox Series X deaths on release? Well: multiply that by all the technological trappings that the various companies presented at least in 2021, halving the usual global availability. Not only that, but the automotive sector has also made its presence felt: much of today’s in-car instrumentation is somehow derived from semiconductor and silicon processes, the two cornerstones on which the supply chain has been lacking in the last 18 months.
If the market has held up until now, without completely emptying the shelves and showcases, it is because the manufacturers’ strategy is based on a six-month logic at the very least. This means that if we were to run out of chips right now, we would still have enough to buy until next summer – in limited stocks, of course, but not in such short supply. However, when we add to the crisis caused by the pandemic, including the forced closure of factories, thousands of sick or dead workers, and the lack of rainfall, which is necessary to clean the factories and the impurities in the materials in countries such as Taiwan, where silicon is processed, then the damage triggers a series of delays that lead us to consider not immediate but six-monthly recoveries, net of an almost total return to normality. And since the situation out there is not quite so calm and peaceful, the Apple, Samsung and Toyota companies have revised their plans, delaying the supply of goods to distributors by weeks, if not months.
Just recently, Apple, which had already reduced its order estimates for 2021 from 90 to 80 million, apparently informed its partners that it does not expect the number of units produced in 2022 to rise again. Translated: we could see fewer iPhones ever, permanently, with a consequent drop in expected revenues. And here’s the reasoning: are we sure that 80 million “new” iPhones every year are not enough? As of the end of October 2021, the Tim Cook-led giant had record revenues of $83.4 billion. Of that, more than $15 billion came from “services”, i.e., apps, games, TV platform subscriptions, music, fitness and so on. In short, everything that is not a ‘product’, not a device.
We need more services, not more smartphones
If the company focused on producing fewer iPhones each year, shifting the investment saved on the supply chain to ecosystem improvements, then we would achieve many goals. The first: less environmental impact. Although Apple says it wants to achieve carbon neutrality, the footprint the company leaves behind is still substantial. Reducing emissions by reducing production would have almost immediate positive consequences for the Earth. I’m talking about Apple, but the example applies to everyone, and especially to the other two of the world’s top smartphone companies, Samsung, and Xiaomi.
Secondly, less anxiety about selling smartphones would give people less anxiety about buying new ones. The life cycle of technological products has shortened so much in a decade and, paradoxically, in inverse proportion to the improvements that allow batteries to deteriorate less, screens to last longer and processors to handle the latest apps and games without great difficulty. In short, terminals are being sold which, in theory, should satisfy consumers’ needs for more years than the average in the past, but there is a push for the same consumers to change models more often.
Third and last point: is the above-mentioned supply of hi-tech that fails to meet demand a real consequence of users’ needs, or does it itself reflect a mechanism of unbridled commercial acceleration? Leaving aside a few emblematic cases, such as the actual difficulty in producing the Nintendo Switch OLED due to the absence of panels, are we sure that filling the warehouse shelves less would not make the purchasing trend, which seems a little too neurotic and extreme, more ‘human’? Would launching an iPhone every 18 months rather than 12 make the world a worse place? No need to suggest an answer. You already know it.