An earlier prediction had said there would likely be 9% growth year-on-year for a total of 1.45 billion units.
Counterpoint said the smartphone industry had been set for a rebound from 2020, with vendors placing large orders for components from the end of 2020 onwards. Consumer demand, due to purchases that had been put off, shored up the market in the first quarter of 2021.
But then came reports from some OEMs that they had received only 80% of orders made for key components during the second quarter, and this fell even more during the third quarter, with some manufacturers claiming they were only getting 70% of their orders.
About 90% of the industry was believed to be affected by the shortages and this would affect second half forecasts, the firm said.
Research director Tom Kang commented: “The semiconductor shortage seems to affect all brands in the ecosystems. Samsung, OPPO and Xiaomi have all been affected and we are lowering our forecasts.
"But Apple seems to be the most resilient and least affected by the AP shortage situation”.
The shortage of APs was triggered by low yield rates in newly established fab lines.
"With the situation seeming to persist it caused a chain reaction throughout the industry. AP vendors like Qualcomm and Mediatek rely on these foundries and manufacturing problems result in fewer processors supplied which in turn affects smartphone OEMs," Counterpoint said.