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Global Smartphone Production Slows Down and the Upcoming 10th Anniversary iPhone is to Blame

April 11, 2017
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Global Smartphone Production Slows Down and the Upcoming 10th Anniversary iPhone is to Blame

Saruni Maina by Saruni Maina
April 11, 2017
in Features
Reading Time: 3 mins read
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Smartphones

SmartphonesAccording to TrendForce Reports, Global smartphone production volume fell by 23 percent for the first quarter of 2017 from the previous quarter, totalling to 307 million units.  Smartphone brands, especially those based in China, lowered their production volume forecasts through the first quarter as demand slowed down significantly due to the conventional seasonal effect.

Major brands such as Samsung, LG and Huawei have begun to ship their flagship devices for the year, but the market demand going into the second quarter is expected to remain relatively weak as consumers are holding off their purchases in anticipation of the 10th anniversary iPhone devices that will arrive in the third quarter, says the report.

But Samsung showed an increase in production volume

Not surprisingly, as the rest of the market was reducing production, Samsung was increasing production. Some might argue that the growth was due to the high-end Samsung devices but no, the registered increase in production volume is thanks to the mid-range Galaxy J series. According to TrendForce’s report Samsung’s sales results for its high-end smartphones fell short of expectations in the first quarter as consumers’ confidence in the brand had yet to fully recover from the recall of Galaxy Note 7.

The economically priced, high-performing Galaxy J series sustained Samsung’s shipments and contributed significantly to the expansion of the brand’s overall smartphone production volume. Samsung was the only brand that saw positive growth in production volume during the off season of the first quarter.

TrendForce says that the Galaxy S8 is expected to make limited sales contribution because the buzz surrounding the next-generation iPhone devices is dampening demand for products from non-Apple vendors.

iPhone production slow as well

The total production volume of all iPhone devices for the first quarter of 2017 fell by 36% compared with the previous quarter and declined by 41% versus the same period a year ago.

TrendForce estimates that the total production volume of all iPhone devices for the second quarter will reach around 43 million units, a decline of 17% from the preceding quarter. Apple will likely to lower the production of existing iPhone models as the company prepares for the launch of the next-generation devices in the third quarter.

The others

LG’s first-quarter smartphone production volume plummeted by almost 40% compared with the prior quarter. This was despite that the brand had rolled out the high-end device V20 in the second half of 2016 to help drive shipments during the turn of the year and beyond. Looking ahead, LG’s shipments will benefit from the impending arrival of G6. TrendForce projects that LG’s production volume will reach around 18 million units this second quarter, similar to the result for the same period last year.

Global Smartphone marketshare Q1 2017

Chinese brands in trouble

According to TrendForce China’s smartphone market in the first quarter was affected by weak demand and uncertainties surrounding the subsidy plans offered by domestic telecom companies. Major Chinese brands lowered their production volume targets and reduced component purchasing during the period.

Huawei remained the leader among Chinese vendors and the third largest brand worldwide in the first quarter, even though its production volume declined by about 22% compared with the fourth quarter of 2016. TrendForce expects Huawei to return to growth in the second quarter as the brand’s high-end series P10, which features dual-lens camera from Leica, will be officially entering the market. Huawei’s second-quarter production volume is estimated to expand by 16% compared with the first quarter and reach close to Apple’s iPhone volume figure for the same period.

OPPO and Vivo were respectively at the second and third place in the Chinese vendor ranking in the first quarter. In terms of production volume, both brands registered a decline from the fourth quarter of around 30%. TrendForce expects OPPO and Vivo to make a recovery as they continue to develop overseas markets and promote affordable premium devices. For the second quarter, two vendors will increase their respective production volumes by 20~30% over the prior three-month period.

Xiaomi saw no sequential growth in its production volume for the first quarter, though the figure did represent a modest growth of 12 percent from the previous year. In contrast, Huawei’s, OPPO’s and Vivo’s year-on-year growth rates for the first quarter were respectively 30 percent and over. According to TrendForce’s estimate, Xiaomi’s second-quarter volume may be more than 10% higher than the prior quarter as the brand rolls out the refresh for its Mi Note series.

Lenovo’s smartphone production volume fell by nearly 30 percent between last year’s fourth quarter and this year’s first quarter, this can be attributed to the fact that the company has not released any new smartphones. Lenovo’s smartphone market share is on a decline, with a 20 percent drop from last year.

Chinese smartphone marketshare Q1 2017

Tags: HuaweiiPhoneLenovoOppoSamsungVivoXiaomi
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Saruni Maina

Saruni Maina

I Google Bing until it Yahoos! | Email: [email protected]

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