Outsourcing Trends Among Smartphone Manufacturers in 2024
The trend of outsourcing design and manufacturing is prevalent among smartphone OEMs, particularly those catering to budget and mid-range segments. A new report highlights the key players in this outsourcing landscape, providing insights into which brands are relying heavily on external partners for design and production.
Motorola Leads in Outsourced Shipments
According to Counterpoint Research, Motorola secured the top position for outsourced design shipments in the first half of 2024. Following closely is Xiaomi, with a staggering 78% of its devices designed externally. Other Chinese manufacturers, such as VIVO, Huawei, HONOR, and the OPPO Group, also feature prominently in this outsourcing trend.
Samsung’s In-House Design Strategy
In stark contrast to its competitors, Samsung stands out as the leading Android brand that predominantly employs in-house designs. The data from the first half of 2024 shows that only 22% of Samsung’s smartphone shipments were sourced from external ODMs, a noticeable drop from 28% in 2022. This shift reflects the company’s strategic focus, particularly in the Galaxy M and Galaxy A series, where lower-end models exhibit increased in-house production.
Shifting Manufacturing Strategies
Counterpoint Research further observed that Samsung is transitioning its manufacturing strategy. The company is moving away from its previous reliance on China-based ODM production for entry-level models, instead opting to ramp up production at its facilities in India. This change comes as Samsung experiences a decline in its market share within the sub-$250 segment, while its presence in the $250+ market is growing.
ODM Partners and Market Dynamics
Notably, Samsung has redirected a significant volume of its orders from ODM partner Huaqin to Shanghai-based Longcheer in 2023. Together, Longcheer, Huaqin, and Wingtech—prominent Chinese firms—account for an impressive 75% of total shipments. Longcheer emerged as the leading ODM in the first half of 2024, benefiting from increased orders from a variety of Chinese smartphone brands in addition to Samsung.
Apple’s Unique Position
In contrast to its rivals, Apple maintains a complete independence from outsourcing, a strategy that aligns well with its focus on the premium smartphone market. This approach allows Apple to retain strict control over design and quality, reinforcing its status in the high-end segment.
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