(Yicai) April 16 -- Global mobile phone shipments slumped by between 4 percent and 6 percent in the first three months from a year ago, ending several straight quarters of growth and potentially marking the beginning of a more pressured year ahead with rising memory chip prices expected to increasingly weigh on smartphone makers, according to the latest data.

Tight supply of memory chips is directly affecting both cell phone shipments and demand, said Nabila Popal, senior research director for global consumer devices at US market research firm IDC. The smartphone market is now entering one of its most challenging periods. Rising component prices are pushing up the price of finished devices, with handset prices in some emerging markets jumping as much as 50 percent, significantly dampening demand.

Against the overall market downturn, performance among leading manufacturers is diverging. The US’ Apple and China’s Honor were the only leading handset makers to post growth in the first quarter, rising 5 percent and 25 percent respectively from a year ago, according to a report released by Chinese market research firm Counterpoint yesterday. Samsung Group, Xiaomi and Oppo Mobile Telecommunications all logged declines of 6 percent, 19 percent and 4 percent respectively.

The brands that managed to grow benefited from global market expansion and more locally tailored product mixes, as well as more aggressive sales strategies and efficient execution despite rising component costs, said an analyst from Hong Kong-based Counterpoint.

Prices of NAND and Dynamic Random Access Memory rose sharply in the three months ended March 31, according to data from the China Flash Market. Although mobile phone prices have lagged behind these increases, they are expected to catch up in the second quarter, with some contract prices potentially jumping by more than 80 percent. At the same time, servers, personal computers, automobiles and other end-user devices are all competing for the same memory supply, further tightening availability.

The price of Low Power Double Data Rate 5 Synchronous Dynamic Random-Access Memory has more than tripled since last year and is still rising, Yicai learned from industry sources. As demand from data centers grows, memory resources are increasingly being diverted to higher-margin sectors, which is putting pressure on mobile phones and other consumer electronics.

Under such pressure, the smartphone market is accelerating its shift toward “lower volumes but higher prices,” as demand in the budget segment is squeezed by rising costs. Industry insiders believe that as the impact of rising memory prices continues to unfold, the adjustment will go on until the end of the year, and cellphone manufacturers may have no choice but to hike their prices repeatedly.

Editor: Kim Taylor