Samsung and OPPO Stimulated Smartphone Shipments of ODMs in H1 2019 EMS Dropped Due to iPhones’ Decline

  • Shipments from EMS companies declined due to the drop in iPhone volumes
  • Longcheer overtook Huaqin for the first time in the smartphone ODM/IDH market
  • Flex surpassed Pegatron in the global EMS market.

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – September 13, 2019

Smartphone shipments from ODM/IDH (Original device manufacturer/independent design house) companies grew at 7% year-on-year (YoY) in H1 2019. Meanwhile, smartphone shipments from EMS (electronics manufacturing services) companies declined by 13% YoY . This is 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 26% share of the total global smartphone shipments, growing marginally from 23% in H1 2018. On the other hand, smartphones with outsourced manufacturing (from ODM/EMS companies) accounted for 55% of total global shipments. This share remained unchanged compared to H1 2018.

Exhibit 1: Global smartphone design & manufacturing operation status in H1 2019

Commenting on the latest findings, James Yan, Research Director at Counterpoint Research, said, “Growth in smartphone shipments of ODM companies was primarily driven by increasing orders from Samsung, Huawei and HONOR, BBK group (OPPO, Realme, OnePlus), Transsion Group, and Xiaomi. Samsung, OPPO, and Realme started to work with ODM companies since H2 2018 for development of mid-and- lower-tier models in their product portfolio. In H1 2019, the global success of the mid-tier Samsung A series and budget OPPO A series benefited their ODM partner Wingtech. As for the Huawei group, since global smartphone shipments of Huawei and HONOR dual brands grew at 50% YoY in Q1 2019, they also contributed to the growth of ODM companies. However, Huawei and HONOR have cut orders to ODMs after their overseas sales shrank due to the US trade ban. We expect the situation to change in H2 2019. While Samsung, BBK group (OPPO, Realme, OnePlus) and Transsion group are likely to keep driving the growth of the ODM market, the Huawei group and Xiaomi may no longer contribute as before.”

Looking at the competitive landscape of the smartphone ODM/IDH market, Flora Tang, Research Analyst at Counterpoint Research, said, “Wingtech, Huaqin, and Longcheer continued to dominate the global ODM/IDH market. The market is getting increasingly consolidated with the top three players accounting for 70% share in H1 2019, compared to 52% in 2017 and 65% in 2018.”

Exhibit 2: Global Leading Smartphone ODMs/IDHs Market Shares 1H 2019

Source: Counterpoint Global Smartphone ODM/IDH Tracker 1H 2019


Commenting on the performances of ODM/IDH companies, Flora said, “Wingtech topped the smartphone ODMs/IDHs ranking list as before, while Longcheer overtook Huaqin for the first time. Both Wingtech and Longcheer achieved YoY growth in H1 2019 against the overall declining trend of global smartphone sales. Wingtech grew by 23% due to orders from Samsung and OPPO, while Xiaomi benefited Longcheer’s growth by shifting more orders to the company. Huaqin Telecom, unfortunately, was severely affected by the US trade ban to its top client Huawei group. This result in a YoY decline of 18% in its total shipments. However,  business of Huaqin was still healthy as it continued to top the smartphone ODMs (design + assembly) ranking list. The fourth leading player, FIH Mobile, achieved growth due to its collaboration with Google. Apart from the top-tier players, most of the other ODMs faced great challenges to survive and suffered in the increasingly intense market competition.”

As for the smartphone EMS market dynamics, Mengmeng Zhang, Research Analyst at Counterpoint Research, commented, “Influenced by the saturation of the overall smartphone market, global smartphone EMS shipments in H1 2019 dropped by 13% YoY. The overall landscape is unchanged, with Taiwanese players Foxconn, Flex, and Pegatron continuously topping the EMS ranking list. These three players combined had an 80% market share in H1 2019. Smartphone shipments from Foxconn and Pegatron dropped due to weak iPhone sales. Nevertheless, leadership of Foxconn remained strong, and its market share rose to 54% in H1 2019 from 49% in H1 2018. Flex achieved 35% YoY growth, and therefore it surpassed Pegatron to be the second-largest player the market. Flex has developed a healthier client portfolio compared to Pegatron, which solely relies on Apple. Xiaomi, Huawei, Google, and Lenovo are the major clients for Flex. Moreover, Flex has built a new factory in India via a partnership with Xiaomi in 2019. This will secure more orders from Xiaomi group.”

Exhibit 3: Global Leading Smartphone EMS market Shares 1H 2019

Global Leading Smartphone EMS market Shares 1H 2019

Source: Counterpoint Global Smartphone EMS Tracker 1H 2019

Finally, giving the outlook for the global smartphone ODM market in the H2 2019, James Yan said, “We estimate that global smartphone shipments will continue to decline and drop by around 2% YoY in H2 2019. However, shipments from ODM companies will grow by around 8% YoY. Moving forward, we expect developing affordable 5G smartphones, diversifying global manufacturing sites, and investing in new products lines will be the key focuses of ODM companies to achieve growth and profitability.”

Please click here for access to the full report “ Global Smartphone ODM/EMS Report 1H 2019”, and read the latest data with thorough analysis on the global smartphone development trend.

Analyst Contact: 

Flora Tang

Counterpoint Research

You can also visit our Data Section (updated quarterly) to view smartphone market share Globally and from the USAChina and India.