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20 Dec 2018

Smartphone Assembly Volumes Dropped 4.4% in the Third Quarter, Driven by Weakening Market Conditions, According to IDC

FRAMINGHAM, Mass. December 20, 2018 – Worldwide smartphone ODM/EMS assembly shipment volumes dropped 4.4% year over year during the third quarter of 2018 (3Q18), due to weakening channel demand. According to the latest results from the International Data Corporation (IDC) Worldwide Smartphone ODM QView, total shipments in the quarter were 355.8 million units. This brings the total volume of shipments to just over 1 billion through the first three quarters of 2018, which is about on par with 2017. Currently the top 6 OEM brands account for more than 70% of the global market smartphone market production. The partner ODMs and in-house manufacturing arms of those six major brands account for nine of the top ten worldwide smartphone assemblers.

"The shipment push between March and the middle of June, which was largely driven by a rapid production shift toward low-priced models from first-tier Chinese brands as well as India's customs policy adjustment, has begun to slow. This caused global smartphone production to drop in 3Q18," said Sean Kao, senior research manager, Worldwide Hardware Assembly Research at IDC. "Despite the release of new products in September that drove a spark of growth late in the quarter, worldwide smartphone ODM/EMS assembly shipment volumes showed a year-over-year decrease of 4.4% and only slight quarter-over-quarter growth of 3.3%."

Worldwide Top 10 Smartphone Assembly Companies, Shipment Volume Ranking, Q1 2017—Q3 2018

Rank

1Q17

2Q17

3Q17

4Q17

2017

1Q18

2Q18

3Q18

1.

Samsung

Samsung

Samsung

Foxconn

Samsung

Samsung

Samsung

Samsung

2.

Foxconn

Foxconn

Foxconn

Samsung

Foxconn

Foxconn

Foxconn

Foxconn

3.

OPPO

OPPO

OPPO

Pegatron

OPPO

Pegatron

OPPO

OPPO

4.

Pegatron

VIVO

VIVO

OPPO

VIVO

OPPO

VIVO

VIVO

5.

LG

Inventec

Pegatron

VIVO

Pegatron

VIVO

Pegatron

Pegatron

6.

VIVO

Pegatron

Inventec

Flex

LG

Flex

Huaqin

Huaqin

7.

Huaqin

Flex

Huaqin

Inventec

Inventec

Huaqin

Inventec

Flex

8.

Flex

LG

LG

LG

Flex

Inventec

Flex

Wingtech

9.

ZTE

Huaqin

Flex

Huaqin

Huaqin

LG

Wingtech

CNCE

10.

Inventec

ZTE

ZTE

ZTE

ZTE

Transsion

Transsion

Transsion

Source: IDC Worldwide ODM & Display Industry Research Group, December 2018

Notes: The ranking on this list is based on complete knock-down (CKD) assembly, which includes in-house assembly, but excludes design without assembly.

Looking ahead, IDC expects smartphone ODM/EMS assembly volumes to return to growth in 4Q18 as production ramps up to meet the needs of holiday spending, as well as preparing the channels in many Asian markets for the Chinese New Year push. Beyond 2018, IDC expects lengthening life cycles caused by high penetration rates will continue to have a negative impact on developed markets. In addition, the appreciation of the US Dollar will lead to weaker buying power in emerging markets. These two issues are likely to result in challenging market conditions in 2019 and beyond. Component suppliers and manufacturers will face the challenge of inventory management since the orders may be lower than previously expected.

IDC Worldwide ODM & Display Industry Research

The object of IDC Worldwide ODM & Display Research is the compilation of manufacturers who provide ODM and EMS services to their clients -- branded vendors. The ODM/EMS manufacturers are in the upstream of industry supply chain, as indicated by the red block in the figure below. ODM/EMS manufacturers include Foxconn, Huaqin, Compal, Quanta, Compal, Wistron, etc. Their clients are branded or white-box vendors, such as Apple, Amazon, Lenovo, Huawei, Oppo and so forth.

Notes:

EMS (Electronics Manufacturing Services): company activity mainly focuses on product manufacture.

ODM (Original Design Manufacturer): company’s activities include both product design and manufacture.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading media, data and marketing services company that activates and engages the most influential technology buyers. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn.



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For more information, contact:

Annabelle Hsu
ahsu@idc.com
+886 2 87580818

Sean Kao
skao@idc.com
+886 2 87580816