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Dear [FIRSTNAME],
Global chip shortage is an incontestable fact nowadays. It makes ICT
(Information Communication Technology) products price increase. Some
ICT manufacturers' products price has raised again, including Cisco,
Aruba, etc.
How to respond to ICT equipment price increases? An ICT supplier
with 20-year experience, Router-switch.com provides 5 tips.
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Global chip shortage is an incontestable fact nowadays.
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The global chip shortage is a reality. By one estimate, the global
chip shortage affects 169 industries.
Apple has reportedly halved iPad production and reused old iPhone
parts for the iPhone 13[1].
Nintendo is slashing production of its switch OLED console by 20
percent, with a spokesman saying chip shortages have affected
production[2].
Gartner estimated that the semiconductor shortage will continue into
2022, and warns that wafer orders could take a year to deliver[3].
Forrester said chip shortages are continued into 2022 and 2023[4].
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The ICT industry is another industry that relies heavily on chips to
produce products. The global chip shortage that has lasted for
several years has provided to continual changes in the prices of
products in the ICT industry.
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ICT Manufacturers changed their price several times recently.
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As the chip shortage, many ICT manufacturers must delay their
lead-time or raise their product price.
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Cisco is a famous ICT manufacturer, but it also suffers from chips
shortages.
"I wouldn't say we have a complete timeline for you as to when
things start to improve. All we know now is we expect this to be
with us through the second half of our year," Cisco CEO Chuck
Robbins said. [5]
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The past year and at the beginning of this year, Cisco has adjusted
its prices intensively several times. About the service (such as
license, software, etc.), the price changed on Jan 30th, 2022. It
raised 10%-30%.
On Mar 4th, 2022, the price of some products reduced 100%, but there
was still numerous products' price raised, up to 149.99%.
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The price also will change on April 1st, 2022, up to 321.72%
From some suppliers' information, Aruba also will raise its price in
April, about 20%. The HPE and Dell also will delay their lead-time
because of the material shortage.
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There are counterfeit products in the market
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The ICT manufacturers' products price increase has skyrocketed
procurement costs for system integrators and end-users. To make
matters worse, there are counterfeit products in the market, which
increases procurement risks.
The COVID-19 pandemic hit the world from both supply and demand
sides. Steve Calabria, the founder of the Independent Distributors
of Electronics Association (IDEA), believes this double squeeze will
result in a surge in counterfeit electronics, affecting the
longevity and reliability of devices made with substandard
components.
Calabria Said, "worldwide shortages have led the way for criminals
to exploit the electronic component marketplace," adding that he's
already seeing early signs of trouble. "Companies that have never
been rated by any other company in the industry [are] showing
significant quantity of parts that are in shortage."[7]
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How to respond to ICT equipment price increase?
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How to deal with the ICT devices price increase? An ICT supplier
with 20-year experience, Router-switch.com suggests taking measures
like these:
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Assess your need
Do an in-depth and complete assessment of whether you or your
company really need a lot of equipment or licenses. Equipment
manufacturers will bundle their equipment and licenses for sale,
leading some customers to purchase more equipment and licenses than
they need. When the assessment is complete and the actual needs are
determined, you can then consider what equipment and licenses you
need.
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Putting pressure on your suppliers
Ask your ICT equipment supplier to deliver the best price. If not,
change supplier! There are numerous excellent suppliers like
Router-switch.com in the market! Excellent price and short lead time
are the two principal things. When you have to change your ICT
devices supplier or other top-branded products, please be vigilant.
Some suppliers may not provide brand-new sealed products. You'd
better make some survey.
First, see the website of the supplier, is it believable? Second,
check the reviews of actual consumers of this supplier. Third, ask
their customer service for detailed information about their company.
Fourth, place a small order to verify if it brand-new seals. Last,
if there are no suspicious things, you can choose this new supplier.
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Choose other manufacturers
Good ICT manufacturers are not only Cisco but also HPE, Huawei,
Dell, etc. If the price of all these big manufacturers is high, you
can also choose medium-to-small manufacturers, such as Aruba,
Ubiquiti, etc. There are many lists of top manufacturers, just
search at Google!
There is likewise a tip here. You should not put all your eggs into
one basket. For example, you can select Cisco
routers
and
switches,
to deploy your company network, when choosing HPE
servers
to deploy
your data center.
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Purchased certified refurbished products
Although refurbished products get some bad reputation, purchasing
certified refurbished products is used as the method. Some
manufacturers will certify refurbished, such as Cisco, HPE, etc. The
price of refurbished products is not very high. If using refurbished
products will not bring a big risk to your company or project, why
not?
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Turn to "Cloud", like SD-WAN
What is SD-WAN? Software-Defined Wide Area Network is a service
formed by applying SDN technology to wide area network scenarios.
This service is utilized to connect enterprise networks, data
centers, Internet applications, and cloud services. SD-WAN is a
rapidly deployable, low-cost and highly flexible WAN solution. The
SD-WAN becomes more popular than before. It saves much cost than
actual hardware but provides useful applications.
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Stay optimistic, the darkness will pass
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The epidemic has gradually been the norm, and major chip
manufacturers are also building new factories for production. Remain
optimistic and always believe that the global chip shortage will one
day be alleviated and equipment prices will gradually fall.
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Need help? Call:
+852-30691868
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