Tech Gifts More Expensive Amidst Supply Chain Issues

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Holiday shoppers are bracing themselves for a more expensive holiday shopping season than usual as supply chain problems force companies to bring their newest, higher-margin electronic devices to market faster, leaving fewer cheaper options during the season of gift-giving.

Top electronics brands are making the most of a severe chip shortage that is affecting production across all price ranges due to logistical problems, a tight labor market, and closed factories in Asia as a result of the ongoing pandemic.

Many websites show that the more affordable devices have longer waiting times for delivery, while expensive devices may be shipped earlier.

An $800, 11-inch iPad Pro can be shipped as early as November 17, but the cheaper and newer entry-level iPad, worth $330, has a one-month wait for shipment.

In addition, a $1,759 Hermes Apple Watch 7 will be shipped to buyers in early December, but buyers of the $400 Apple Watch will have to wait much longer.

Samsung will also release the latest $1,900 Galaxy Z Fold a week earlier than the $1,200 S21 Ultra. Both devices feature the latest 5G chips.

Qualcomm Inc, which makes high-end 5G-enabled chips for Apple and many top Android phones, said its customers prioritize premium and high-tier gadgets.

While global smartphone shipments slumped in the third quarter due to component shortages in Q3, robust sales of mid-to upper-end smartphones catapulted third-quarter sales to a record high of more than $100 billion.

Smartphones are forecast to be sold at an average price of $410 this holiday quarter, up from $376 in the previous quarter and $395 last year, while laptops will be 8% more expensive at $830 in the holiday quarter, according to IDC.

GoPro Inc, which now focuses on high-margin action cameras, said consumers bought cameras at the top end of its product range at prices above $300.

In addition, laptop manufacturers, who rely heavily on Asian factories that produce chips for their devices, have prioritized production of the higher 14″ and 15″ variants instead of the cheaper 11″ Chromebooks.

For more information, read the original story in Reuters.

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