Global Smartphone Assembly Market Status and Outlook 2022

Abstract: Smart phones and PC foundry assembly market is very different, some brand mobile phone manufacturers such as Samsung, OPPO and vivo have not entered the smart phone market before, that is, have manufactured various 3C products, have their own factories, so when cutting into the smart phone market, products take their own design and assembly production, some brand mobile phone manufacturers such as Apple and Millet, etc., from the early stage of development will outsource manufacturing assembly to foundry assembly manufacturers.

Smart phones and PC FOUNDRY assembly market is very different, some brand mobile phone manufacturers such as Samsung, OPPO and vivo have not entered the smart phone market, that is, have manufactured various 3C products, have their own factories, so when cutting into the smart phone market, products take their own design and assembly production, some brand mobile phone manufacturers such as Apple and Millet, etc., from the early stage of development will outsource manufacturing assembly to foundry assembly manufacturers.

Mobile phone assembly market classification

In addition to its own research and development and manufacturing, the mobile phone assembly industry can be divided into two categories: ODM (Original Design Manufacturing, original design manufacturer) and EMS (Electronic Manufacturing Service, electronic service manufacturer). ODM is based on the needs of brand manufacturers, for brand research and development, design and production of products, providing services including product definition, industrial design, circuit system design, software and hardware design, material and component procurement, pre-production, product testing, large-scale production, supply chain and logistics control, etc., covering the whole process of product development and production, brand customers are mainly responsible for marketing.

EMS provides raw material procurement, product assembly, logistics and distribution services according to the order of brand manufacturers, but does not involve product design services. Since EMS does not involve product design, product design is divided into In-House and IDH (Independent Design House, independent design manufacturers) 2 kinds, In-House refers to the brand manufacturers to design their own products, representing the manufacturers to Apple-based, IDH is based on the needs of brand manufacturers, only brand research and development and design products, do not provide manufacturing services, IDH on behalf of manufacturers to millet-based.

In 2022, mobile phone OEM assembly shipments increased by 5.1% annually, exceeding the 3.79% growth rate of the overall smartphone market

Looking at the shipment situation of the smartphone market, after the shipment reached the peak of 1.457 billion units in 2017, it began to turn into a recession, and in 2020, due to the impact of the new crown pneumonia epidemic, the shipment volume fell by 10.5%, but as the epidemic gradually slowed down, the shipment volume of smart phones also returned to growth, and it is expected that the shipment volume in 2022 will be 1.386 billion units, an annual increase of 3.79%. Looking to the longer term, shipments are expected to return to the top 1.4 billion units in 2019 as the economies of developing countries such as Southeast Asia and Africa continue to grow and drive up smartphone penetration.

In the smart phone OEM assembly market part, before 2018, because the smart phone is still growing, many brand mobile phone merchants take more self-made strategies, so the proportion of the overall smartphone industry outsourced to the ODM / EMS assembly plant has been less than 40% for a long time, and the growth rate of smart phone OEM assembly shipments has long been lower than the overall smartphone market shipments, but as smart phone products enter the mature period, shipments decline and gross profit decline and other factors, so that some brand mobile phone merchants began to try to expand the proportion of outsourcing assembly, To further reduce product development costs, the main reason is to hand over the less than $150 machine to Wingtech, Huaqin and Longqi and other foundry assembly plants.

Since 2019, brand mobile phone operator OPPO has begun to outsource a large number of its mobile phones to ODM manufacturers, and Samsung has also begun to release a small number of ODM orders at the end of 2019, but in 2019, Huawei recycled some outsourced ODM orders, coupled with the poor overall market conditions of smart phones, so that the shipment of smart phones ODM/ EMS in 2019 is still 1.92% year-on-year, but compared with the overall smartphone market, it still pays better results.

In 2020, as Samsung and OPPO further expand the proportion of outsourced ODM, the ODM/EMS shipments of smartphones in 2020 will reach 663 million, an annual increase of 14.76%. In 2021, with the proportion of outsourced ODM of brand mobile phone manufacturers still slowly increasing, and the overall smartphone market resuming growth due to the gradual slowdown of the impact of the new crown epidemic, the smartphone ODM / EMS market still increased by 16.64% year-on-year.

Looking forward to 2022, although the proportion of outsourced ODM/EMS of brand mobile phone manufacturers has gradually stagnated, the overall smartphone market will still increase by 3.79% annually, and the shipment of smartphone ODM/EMS will still increase by 5.1% annually. If from a longer-term point of view, for smart phone ODM / EMS manufacturers, the key is whether they can win the outsourced orders of brand mobile phone manufacturer vivo, or have the opportunity to usher in a significant increase in shipments again, if vivo still adheres to 100% self-made model in the future, the growth rate of smartphone ODM / EMS shipments will gradually approach the overall smartphone market.

Further observing the situation of the smartphone assembly market, more than 60% of the shipments before 2019 are mainly self-developed and self-made by brand mobile phone manufacturers. Since 2020, with the expansion of the proportion of outsourced ODM by Samsung and OPPO, the overall smartphone adoption ODM production model has increased significantly from 21% in 2019 to 28%, and the proportion continues to increase.

The IDH+EMS model has also slowly improved since 2020, mainly because Xiaomi, a brand mobile phone manufacturer using this model, has continued to increase its market share in the smartphone market, and the production model using In-House+EMS has also slowly increased since 2020, which is from the continuous increase in the market share of Apple using this model.

Editor: Xin ZhiXun - Lin Zi Source: TrendForce