Global slowdown in production of popular tech leaves shoppers at the mercy of ‘scalpers’
Some of the most popular Christmas presents are being sold online with mark-ups of more than 70% after selling out in major high street stores because of the global shortage of microchips.
Supply-chain bottlenecks and the computer-chip shortages are affecting availability of some of the most sought-after gifts, from games consoles to Dyson products. Shoppers were warned last week of a delay of at least one month for some of the most popular iPad models.
Games consoles have been in limited supply for most of the pandemic, and companies are struggling to cope with the surge in demand for Christmas. Customers have attacked “scalpers” online for buying stock and pushing up prices.
The Microsoft Xbox Series X, launched in November 2020, typically sells for £449.99 but was sold out or in very limited supply at most retailers last week, including Currys, John Lewis, Argos and Asda. But it was available for sale at the online marketplace onbuy.com for £669.49, a mark-up of almost 50%.
Sony’s PlayStation 5 console, which also usually sells for £449.99, was widely sold out at retailers last week as well, including on Sony’s own website. It was offered for sale by one online outlet last week for £779.99, a mark-up of 73%.
Alex Baldock, chief executive of the electrical store Currys, said last week that the store faced an “acute challenge” in securing orders for popular products for Christmas. It was hard to get a full range of laptops, and the latest Dyson hairstyling product, the Airwrap, was like “gold dust”.
The Airwrap retails at £449.99, but was out of stock on Thursday on Dyson’s UK website. A statement on the online store said: “Due to global supply challenges, stock may be limited at certain times, but more stock is coming soon.” The Airwrap was also unavailable online at Amazon, Boots and John Lewis.
The manufacture of many electronic products has been scaled back because of a global shortage of microchips, described by the Semiconductor Industry Association in the US as the “brains of modern electronics”. Microchips, also known as integrated circuits or semiconductors, are a set of tiny electronic circuits on a small, flat piece of silicon.
Global sales of microchips will reach almost £400bn this year but production concentrated in east Asia has been significantly disrupted by the pandemic. Meanwhile, demand has continued to grow for computer chips that are required for every sector of the economy, from ventilators used to treat patients with Covid-19 to consumer leisure goods to cars.
Apple was reported by Bloomberg in October to be cutting production targets of its iPhone 13 by 10 million units because of prolonged microchip shortages. The electronics giant has also reportedly cut iPad production to allocate more components to its latest iPhone.
The deadline at the UK Apple store for ordering an iPad mini in time for Christmas was 17 November, and the deadline for an iPad was 24 November. Dispatch times on Amazon last week for a £319 2021 10.2-inch iPad were between one and two months.
Clive Black, a retail analyst at investment group Shore Capital, said: “Sales will be down overall because retailers won’t be able to fulfil orders to satisfy all the demand, but the silver lining is that they will be enjoying full-price sales with very little discounting.”
Richard Hyman, a retail consultant, said shops already struggling with increased labour costs and supply shortages now faced the additional impact of Omicron, which would almost certainly curb shopping activity in city and town centres this week. He said: “This retail industry is already creaking and now it faces even more pressure.”
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