China Accounted for 67% of Global Handset Production in 2021

The global handset production in 2021 was similar to that a year ago. Although there was a brief rise in production in some regions due to the release of pent-up demand, the negative impact of the COVID-19 pandemic remained throughout the year and did not allow recovery to pre-pandemic levels.

China remained volume leader but future position uncertain

China contributed to 67% of the global handset production in 2021, primarily because Apple and other Chinese OEMs failed to make up for Huawei’s decline in production. In 2020, Huawei accounted for the big portion of the China’s total production. Unlike Huawei, which mostly manufactures its handsets domestically, other Chinese OEMs are seeking to diversify their production sites to fulfil local demand through local production. Apple, which has a high proportion of production in China, is also looking to diversify its production sites. With diminishing demand for handsets in China, the proportion of Chinese production is also expected to decline in the future.

India a distant second with mixed signal for future growth

India accounted for 16% of global handset production in 2021. Production in India, the second largest geography in terms of production volume, rose more than 5% YoY driven by Apple, Xiaomi and OPPO. Taking into consideration Apple’s plan to produce the iPhone 14 in India, the country’s contribution will continue to rise. However, the Indian government’s regulations on low-priced phones made by Chinese OEMs might slow down this trend.

Vietnam third with 10% share, may bag iPhone production

Vietnam accounted for 10% of total global handset production in 2021, similar to that a year ago. Despite Samsung’s increased production in Vietnam, the withdrawal of LG’s smartphone business from the country had a negative effect on production volume, resulting in only a slight increase in production compared to the previous year. As Apple is moving some of its iPad production to Vietnam, the company might transfer some of its iPhone production too, which will then boost overall handset production volume in the country.


Global Handset Production Share by Country


Source: Counterpoint Global Handset Production Report


Apple actively testing locations outside China

Apple is highly dependent on China because a major chunk of its production comes from the country. However, Apple is starting to test its production sites outside China to diversify production and reduce its reliance on the country against the backdrop of the frequent domestic disruptions related to the pandemic and rising US-China tensions. The production of the iPhone 14 in India and iPad in Vietnam seems to be a part of this endeavor. However, it will take a considerable amount of time for any other country to replace the Chinese manufacturing ecosystem.

Samsung strong on diversification

Samsung can now be considered relatively well-diversified in terms of handset manufacturing. Learning from the hardships it faced during the pandemic because of its higher focus on just one country for production, the company will avoid concentration of manufacturing. Additionally, due to the division of global production chains and cost pressure caused by inflation, Samsung will pursue setting up production hubs near its major markets, such as India, Indonesia and Turkey.

Major Chinese OEMs grew in China due to Huawei’s absence

Major Chinese OEMs like Xiaomi, OPPO and vivo, which had been declining or stagnating since 2016, were able to increase their production in China in 2021 because Huawei was held back by US sanctions. Meanwhile, production volume in India increased but its proportion in global production decreased. This might remain if the Indian government continues with its additional regulations on Chinese OEMs. Indonesia is the base for Chinese OEMs in the Southeast Asian market in addition to India, and the proportion of production is expected to increase as the regional market continues to grow.

Unlike the major companies mentioned above, HONOR manufactured most of its handsets in China. The company will diversify its production bases as it looks to enter markets outside China, but, just like Huawei, it will maintain China as its main production hub.


Handset Production in China by Major OEMs(M Units)

Source: Counterpoint Global Handset Production Report



Although the direct impact of the pandemic continues to diminish, geopolitical and macroeconomic issues, such as conflicts and inflation, are preventing the market from recovering. The global handset market is expected to decrease by 8% in 2022 from 2021. Within this broader market, the smartphone market will have a less severe decline because of the increasing transition to smartphones from feature phones. Starting 2023, the handset market is expected to maintain a low single-digit percentage growth.

Considering the market’s reduced growth rate and the continued downward pressure on ASP of handsets, OEMs have an incentive to maintain concentrated production sites to reduce costs.

Despite this incentive, the disruptions caused by the pandemic and increasing geopolitical tensions highlighted the disadvantages of having a concentrated production site, forcing companies to set up multiple production sites.

Currently, there appears to be a balance between these two factors. However, in the long run, as the production concentration outside China increases and cost competitiveness is achieved, handset production outside China will accelerate further.

Minsoo is a Research Analyst at Counterpoint Technology Market Research and located at Seoul, Korea. Minsoo is interested in various technology sectors and its future development. Prior to joining Counterpoint Research, Minsoo had experience in various industry from tech start up to chemistries.

Term of Use and Privacy Policy

Counterpoint Technology Market Research Limited


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.