Smartphone ODMs Achieve 7.2% YoY Growth in H1 2021, Show Resilience to COVID-19, Component Shortages

Hong Kong, San Diego, Buenos Aires, London, New Delhi, Beijing, Taipei, Seoul – September 8, 2021

Smartphone shipments from ODM/IDH (Original Design Manufacturer/Independent Design House) companies grew 7.2% YoY in H1 2021, according to the latest report from Counterpoint Research’s ODM/IDH Tracker. This comes as the global smartphone market rebounded 19% YoY in H1 2021. Smartphones with outsourced designs (from ODM/IDH companies) declined to account for a 36% share of the H1 2021 global smartphone shipments, down from 40% in H1 2020.

Counterpoint Research Global Smartphone Design Operation Status H1 2021
Source: Counterpoint’s Global Smartphone ODM/IDH Tracker, H1 2021

Senior Research Analyst Ivan Lam said: “Although the COVID-19 pandemic continued to materially impact the global smartphone market, ODMs managed to achieve decent growth. The growth of the ODM market was primarily driven by increasing orders from key clients like Samsung, OPPO Group, Xiaomi and Lenovo/Motorola. H1 2021 outperformer Xiaomi’s orders to ODM/IDH companies increased by more than 40% YoY. Xiaomi is now the largest client in the global smartphone ODM market.”

On component shortages and cost increases, Lam said: “We found that the impact of these issues was much higher on ODMs than on the in-house production of OEMs. This is due to the business model and mechanism of ODMs, under which ODMs produce only after receiving orders. Although ODMs have the FOPDI (Forecast, Order, Production, Delivery, Inventory) workflow with OEMs, ODMs tend to reserve lower component inventory than market forecasts, due to volatile market dynamics and cash flow management. As such, several OEMs suffered unexpected sales declines, while the lack of bargaining power undermined their ability to increase prices.”

Commenting on the different growth paths of global smartphone shipments and ODM/IDH shipments, Senior Research Analyst Yang Wang said: “ODM/IDH companies tend to produce mid- to low-priced smartphones. However, in the past year, OEMs paid more attention and channeled more resources towards more premium products. These products were mainly produced in-house and by EMSs. As a result, while the absolute shipment numbers from ODMs/IDHs increased, in-house and EMS shipments increased even more.” Counterpoint figures show smartphones priced at less than $200 dropped to a share of 47%, down from 54% a year ago.

Counterpoint Research Share of Global Smartphone Sales by Price Band H1 2021
Source: Counterpoint’s Smartphone Market Pulse Service, H1 2021

Looking at the competitive landscape of the global smartphone ODM/IDH market, Huaqin, Longcheer and Wingtech continued to dominate the market. The ‘Big 3’ now account for 76% of the global ODM/IDH smartphone shipments, up from 69% a year ago.

The component shortage and cost increase issues have put further pressure on the ODM industry. The Tier II and lower ODMs have been struggling to secure consistent supply from upstream partners, and the lack of bargaining power means they struggle to keep supply costs down. On the other hand, leading OEMs have the power to influence upstream component vendors, both in supply and price.

Ranking and Growth of Global Smartphone ODM/IDH Vendors H1 2021
Source: Counterpoint’s Global Smartphone ODM/IDH Tracker, H1 2021

Commenting on the ODM dynamics, Lam said: “Huaqin continues to retain the number one spot among ODMs. Longcheer saw a significant increase thanks to Xiaomi’s outstanding performance. Tinno also performed well, due to increasing orders from Lenovo/Motorola, which saw success in LATAM. Going forward, we expect continued momentum of OEMs deepening partnerships with ODMs/IDHs and EMSs in H2 2021 and beyond.”

The latest “Global Smartphone ODM Report – H1 2021” is available here.

Counterpoint Research’s market-leading Market Pulse service for mobile handsets is available for subscribing clients.

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Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts: 

Ivan Lam

Yang Wang

Counterpoint Research

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