Top

Smartphone Shipments from ODMs Declined while EMS Grew by Over 20% in 2018

  • Blogs
  • / Flora Tang

Smartphones shipments from ODM/Independent Design House (IDH) companies declined by 1% year-on-year (YoY) in 2018 to 358.2 million units while those from electronics manufacturing services (EMS) companies grew 23% to 479.2 million units, according to the latest research from Counterpoint’s ODM/IDH/EMS tracker.

As a result, smartphones with outsourced designs (from ODM/IDH companies) had a 24% share of the total global smartphone shipments, growing marginally from 23% in 2017. On the other hand, smartphones with outsourced manufacturing (from ODM/EMS companies) accounted for 56% of total global shipments, rising sharply from 48% in 2017.

Exhibit 1: Global smartphone design & manufacturing operation status in 2018

Global smartphone design & manufacturing operation status in 2018

Below is our detailed analysis of the market dynamics and latest developments in the global smartphone OEM/IDH/EMS industry.

Global Smartphone ODM/IDH (design outsourced) market analysis:

  • In 2018, smartphone shipments from ODM/IDH companies declined despite an increase in orders from new clients Realme and Samsung, who initiated cooperation with Chinese ODMs in 2018 to minimize production costs.
  • OEMs heavily relying on ODMs to design and manufacture products include Nokia HMD, Motorola, and Xiaomi. In comparison, external design accounts for less than 5% of the products from Samsung, OPPO, and Vivo. Apple and OnePlus, with their slim product portfolio targeting premium market, only outsource manufacturing to EMS companies.
  • The leadership position of Huaqin and Wingtech has solidified. Together, they grabbed close to a 50% share in 2018’s smartphone ODM/IDH market. Huaqin was the leader in global ODM (design + manufacturing) market with a 25% share while Wingtech led in IDH (design only) market with 50% shares. Both Wingtech and Huaqin achieved over 10% YoY growth following the aggressive global expansion of their key clients, Huawei and Xiaomi, in 2018.
  • Besides Wingtech and Huaqin, ODMs delivering positive YoY growth against the declining market trend in 2018 include Longcheer, FIH Mobile, Hipad Intelligent, and Ontim. Longcheer grew by 66% YoY thanks to increasing orders from its top client Xiaomi. However, over-dependence on Xiaomi would be risky for the sustainable development of Longcheer in the long run. FIH Mobile grew by 63% YoY following the rising sales of its major client, Nokia HMD, in 2018. Nevertheless, the growth of both Nokia HMD and FIH Mobile started slowing down since H2 2018. Shipments of Hipad Intelligent zoomed 100% YoY, albeit from a smaller base. Hipad‘s strength in global production, with its established manufacturing sites in India and LATAM, helped the company earn trust from new clients in India, China, and the US in 2018.

Exhibit 2: Global Leading Smartphone ODMs/IDHs Market Shares 2018

Global Leading Smartphone ODMs/IDHs Market Shares 2018

  • According to our observation, ODM companies are increasing investment in IoT and smart wearable sectors (E.g., smart speakers, smartwatch, IP cameras, and more). These companies are trying to develop new businesses to offset the declining smartphone sales.
  • As for smartphone shipments, we expect the share of smartphones with outsourced designs to remain at around 24%-25% in 2019.

Global Smartphone EMS (manufacturing outsourced) market analysis:

  • Global smartphone shipments of EMS companies accounted for 32% of the total smartphones shipped in 2018.
  • Robust growth of one of their key clients, Huawei Group, drove the increase in shipments of EMS companies. In fact, Huawei helped EMS to maintain growth even though sales of their top client, Apple, suffered a decline in 2018.
  • Nearly 23% of the smartphone shipments of the Huawei Group come from EMS companies, up from 12% in 2017. Honor 8X, sold over four million units within H2 2018, was one of the successful models that Huawei built with its EMS partner Foxconn.
  • Besides the Huawei Group, OEMs which increased outsourced manufacturing volumes in 2018 include OnePlus, Asus, Micromax, LG, and Tecno. LG aggressively launched new models through 2018, which significantly benefited its EMS partners. LG smartphones manufactured by EMS partners grew by over 400% YoY despite a decline in global smartphone sales of the brand. OnePlus, achieving 270% YoY growth in smartphone shipments during 2018, also benefited the business growth of its EMS partners.
  • In terms of the competitive landscape, Foxconn, for its long-established expertise in the entire EMS value chain including components procurement, supply chain management, automated production, and globalized development, is the indisputable market leader controlling over 50% of the smartphone EMS market. Foxconn has built solid partnerships with high-profile smartphone OEMs such as Apple, Huawei, Xiaomi, and Nokia HMD.
  • Following Foxconn, Pegatron, Flex, and Inventec are the other top players in the global smartphone EMS market. Pegatron, headquartered in Taiwan, is another EMS partner of Apple, apart from Foxconn. Flex, headquartered in Singapore, managed to build an extensive client portfolio covering both Chinese OEMs and international brands Motorola and Google. Inventec, also based out of Taiwan, is one of the key partners of Xiaomi.

Exhibit 3: Global Leading Smartphone EMS market Shares 2018

Global Leading Smartphone EMS market Shares 2018

Please CLICK here for access to the full report “ Global Smartphone ODM/IDH/EMS Monitor 2018”, and read the latest data with thorough analysis on the global smartphone development trend.

Flora Tang

Flora is a Research Analyst at Counterpoint Research based out of Hong Kong. She started her career as an analyst for new market development with LeEco APAC, where she conducted market research regarding telecommunications, smart devices, internet and OTT business across APAC region. Furthermore, she moved to China Mobile International (CMI) to support globalization of the leading Chinese telecom giant, and help with strategic cooperation between CMI and global carriers. To pursue her line of interest in smart devices, IoT and mobile ecosystem, she joined Counterpoint Research team. In academics Flora holds a Master in Corporate Communications with the Chinese University of Hong Kong, and Bachelor of Law in International Relations and Regional Studies with Sun Yat-sen University.
Click here to see all posts by this author
List
  • DEVICES
  • ECOSYSTEM
  • RECENT POSTS

Counterpoint Weekly Newsletter

Read Here

Coverage

Insights

Social media

Contact us

Copyright ⓒ Counterpoint Technology Market Research | All rights reserved

Term of Use and Privacy Policy

Counterpoint Technology Market Research Limited

Registration

In order to access Counterpoint Technology Market Research Limited (Company or We hereafter) Web sites, you may be asked to complete a registration form. You are required to provide contact information which is used to enhance the user experience and determine whether you are a paid subscriber or not.
Personal Information When you register on we ask you for personal information. We use this information to provide you with the best advice and highest-quality service as well as with offers that we think are relevant to you. We may also contact you regarding a Web site problem or other customer service-related issues. We do not sell, share or rent personal information about you collected on Company Web sites.

How to unsubscribe and Termination

You may request to terminate your account or unsubscribe to any email subscriptions or mailing lists at any time. In accessing and using this Website, User agrees to comply with all applicable laws and agrees not to take any action that would compromise the security or viability of this Website. The Company may terminate User’s access to this Website at any time for any reason. The terms hereunder regarding Accuracy of Information and Third Party Rights shall survive termination.

Website Content and Copyright

This Website is the property of Counterpoint and is protected by international copyright law and conventions. We grant users the right to access and use the Website, so long as such use is for internal information purposes, and User does not alter, copy, disseminate, redistribute or republish any content or feature of this Website. User acknowledges that access to and use of this Website is subject to these TERMS OF USE and any expanded access or use must be approved in writing by the Company.
– Passwords are for user’s individual use
– Passwords may not be shared with others
– Users may not store documents in shared folders.
– Users may not redistribute documents to non-users unless otherwise stated in their contract terms.

Changes or Updates to the Website

The Company reserves the right to change, update or discontinue any aspect of this Website at any time without notice. Your continued use of the Website after any such change constitutes your agreement to these TERMS OF USE, as modified.
Accuracy of Information: While the information contained on this Website has been obtained from sources believed to be reliable, We disclaims all warranties as to the accuracy, completeness or adequacy of such information. User assumes sole responsibility for the use it makes of this Website to achieve his/her intended results.

Third Party Links: This Website may contain links to other third party websites, which are provided as additional resources for the convenience of Users. We do not endorse, sponsor or accept any responsibility for these third party websites, User agrees to direct any concerns relating to these third party websites to the relevant website administrator.

Cookies and Tracking

We may monitor how you use our Web sites. It is used solely for purposes of enabling us to provide you with a personalized Web site experience.
This data may also be used in the aggregate, to identify appropriate product offerings and subscription plans.
Cookies may be set in order to identify you and determine your access privileges. Cookies are simply identifiers. You have the ability to delete cookie files from your hard disk drive.