The global smartphone production is heading for slower growth in 2018 primarily due to increase in input costs for manufacturing devices and not because of poor demand from wireless phone buyers.
The worldwide smartphone production will grow 5 percent to 1.53 billion units in 2018 from 1.46 billion units estimated for 2017 with a growth of 6.5 percent, according to TrendForce.
Smartphone makers will face cost pressure as the prices of key smartphone components constantly rise.
The 6.5 percent increase in the global smartphone production in 2017 was mainly driven by Chinese telecommunication operators’ subsidies to wireless users in 4G monthly fees. The expansion of China phones in emerging telecom markets have also contributed to the growth last year.
Non-China vendors are expected to achieve 3 percent growth in 2018 reversing the dip since 2015 — influenced by innovative applications in Apple iPhone X and its future flagship models that will hit the smartphone market in coming months.
An IDC report earlier indicated that smartphone shipments are expected to maintain positive growth through 2021. Smartphone shipment is expected to grow from 1.47 billion in 2016 to just over 1.7 billion in 2021, according to the IDC chart.
“The combination of new user demand as well as a somewhat stagnant 2-year replacement cycle will be enough to keep the market at a 5-year compound annual growth rate (CAGR) of 3.3 percent,” said IDC earlier.
TrendForce said Samsung will face challenges in the global smartphone market. Samsung will continue its top position in smartphone production in 2018. Samsung will face 3 percent drop in smartphone production in 2018 because of challenges and competition from its rivals, including Apple in high-end market and China brands with Android OS.
Apple iPhone’s production rose 3 percent in 2017 due to the technical barriers in improving yield rate of innovative models. Apple’s iPhone production estimated to register 7.5 percent growth in 2018.
Xiaomi has clocked 76 percent growth in smartphone production in 2017 mainly due to increasing physical distribution channels and expanding overseas markets such as India and Indonesia.
OPPO achieved smartphone production growth of 17.8 percent in 2017. Vivo achieved smartphone production growth of 19.5 percent in 2017.
Smartphone productions of OPPO and Vivo in 2018 are expected to drop 10 percent compared with 2017 because OPPO and Vivo will focus on domestic consumption and will face narrower room for profit growth and heavier pressure for growth as the prices of key components rise.