Worst stock shortages in 20 years, says Brightpoint

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Brightpoint chairman Robert Laikin tells of impending supply issues in global handset market as component shortages and huge smartphone demand combine

Brightpoint founder, chairman and chief executive Robert Laikin said global stock shortages are inevitable as the market moves into the new year, echoing recent warnings by fellow distributors 20:20 Mobile and Data Select.

The lack of supply, the worst in two decades according to Laikin, is the result of increasing demand by manufacturers for components common to a range of consumer electronics devices. The shortfall will tell most as the market emerges from a buoyant fourth quarter where global demand for smartphones will be high, he said.

Strong consumer demand and and severe component shortages have combined to create a market dynamic unlike any he has witnessed in his two decades in the industry, remarked Laikin.

“Demand is so strong that we have seen, for the first time I can remember in 21 years in this industry, price increases from manufacturers,” said Laikin.

“The increases have been small, but they are increases. And that gives you an idea of just how strong demand is right now. To be honest, we wish we had access to inventory, specifically on the smart side, because demand is so strong.

“And I’m not saying [it is only] in one pocket in Europe or in one pocket in Asia, or in one pocket in the US, or with one particular operator or manufacturer. It is right across the line. Demand for smartphones, with all the new launches recently, is unbelievably strong right now.”

Laikin went on: “There are major component shortages. The lack of a lot of these common components between smartphones, regular phones, camera phones, tablets and other consumer electronics have put all of the electronics industry on a sold-out basis.”

At the same time, Laikin suggested the industry will ride the storm through the Christmas quarter. “We aren’t [currently] seeing issues and we don’t anticipate them until the first quarter of 2011, when demand will be unable to be fulfilled by supply.”

Brightpoint handled 14 per cent more devices in the quarter ended September 30, compared to a year ago, with revenue from distribution activities jumping nearly £25 million.

The total number of wireless devices handled by Brightpoint over the quarter increased from 21,792 to 24,907. Revenue for the three months increased from £532 million to £546 million.

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