The global production of smartphones is steadily declining. After a nearly 20% drop in the first quarter of 2023, it was followed by another 6.6% drop to 272 million units in the second quarter. Only 522 million smartphones were sold in the first half of 2023, down 13.3% from the same period last year. Such low numbers represented an anti-record of the last decade in both quarterly and semi-annual periods.
Analyst firm TrendForce identifies three main reasons for this drop in production:
- China’s easing of pandemic restrictions has not boosted demand;
- The emerging Indian market has not yet lived up to expectations;
- The economic downturn is slowing consumer spending.
Samsung continues to lead the manufacturer rankings, shipping 53.9 million units in the second quarter of 2023, down 12.4% from the first quarter. Amid global economic difficulties and stiff competition, as well as the debilitating effect of flagship phone launches earlier in the year, Samsung’s second-quarter performance lagged the prior-year period. The new foldable models, expected in the third quarter, will have little impact on sales given their small share of Samsung’s overall smartphone portfolio.
Apple’s second quarter tends to be its weakest production quarter due to generational change. Production volume in the second quarter was 42 million units, down 21.2% sequentially. The upcoming iPhone 15/15 Plus could face issues due to poor CMOS sensors, which could impact performance in Q3. Apple and Samsung are close in their annual production forecasts. If the iPhone 15 series proves successful, Apple has a good chance of ousting Samsung from its longstanding position as the world market leader.
Xiaomi (Branded Xiaomi, Redmi and POCO) reported cumulative shipments of its smartphones of 35 million units, up 32.1% sequentially. The forecasts for the third quarter assume that sales will remain at the same level.
Oppo (Oppo, Realme, and OnePlus brands) has benefited from a wave of demand recovery in Southeast Asia and other regions, shipping about 33.6 million smartphones, up 25.4% from the first quarter. Oppo’s production is forecast to rise 10-15% in the third quarter, driven primarily by shipments to markets in China, South Asia, Southeast Asia, and Latin America.
Transsion (TECNO, Infinix and Itel brands) overtook Vivo for the first time in fifth place in the global ranking of smartphone manufacturers with 25.1 million units shipped. Revenue growth compared to the first quarter was a record 71.9%. Transsion’s high production volume has been made possible by customer restocking, new product launches and the company’s entry into mid- to high-end markets. The company’s growth is expected to continue in the third quarter.
Vivo (Vivo and iQoo brands) is operating cautiously in the face of a slowing global economy, as evidenced by its conservative production plan: Vivo shipped 23 million units in the second quarter, representing a modest quarterly growth of 15%, and slipped to sixth place ahead of global rankings.
Demand in consumer markets such as China, Europe and North America has not yet recovered significantly. Even if economic performance improves in the Indian market, it will still be difficult to reverse the global decline in smartphone production. TrendForce forecasts that smartphone production could fall further in the second half of the year as the current economic outlook is bleak.