7 June 2023
Smartphone production falls by record 19.5% year-on-year to ten-year quarterly low of 250 million units in Q1/2023
Market research firm TrendForce reports that global production of smartphones fell by a record 19.5% year-on-year to only 250 million units in first-quarter 2023, a historic low in quarterly production since 2014, as the ongoing global economic downturn continues to impact consumer confidence in the market.
Samsung produced 61.5 million units, down 16.7% year-on-year but up 5.5% quarter-on-quarter due to the launch of its Galaxy S23 series. However, TrendForce predicts a nearly 10% drop in Q2 production due to weakening demand for new models.
Apple’s production fell by 11.9% year-on-year and 27.5% quarter-on-quarter to 53.3 million units in Q1. The new iPhone 14 series accounted for about 78% of this, an improvement on a year ago. However, as the firm navigates the transition period between model launches, production is expected to fall by 20% in Q2.
In light of unsatisfactory market conditions and necessary inventory adjustments, brands such as China’s Oppo (which includes Oppo, Realme and OnePlus) made strategic moves to reduce production in Q1, by 17% quarter-on-quarter to 26.8 million units. However, TrendForce forecasts a more than 30% rise in production in Q2, due to successful inventory management and a moderate demand resurgence in Southeast Asia and other regions. In addition to continuously strengthening its market share of high-end models in China, Oppo has achieved notable sales success in South Asia, Southeast Asia, and Latin America. In fact, its overseas market accounts for nearly 60% of its total sales.
Xiaomi (which includes Xiaomi, Redmi and POCO) saw its production volume fall by 27.4% quarter-to-quarter to 26.5 million units in Q1. This can be attributed largely to a global dip in consumer confidence and an overstocked inventory of finished products at Xiaomi, leading to restrained production plans. Due to ongoing inventory adjustments in Q2, quarterly production growth is projected to be capped, to a modest estimated increase of about 20%.
Concurrently, Vivo (including Vivo and iQoo) saw its production fall by 14.2% quarter-to-quarter to 20 million units in Q1. While China continues to be the primary market for Vivo’s sales, Chinese market demand remains stagnant in Q2, following the reopening of the country’s borders. Production is hence expected to grow only modestly, by about 10%.
The continuous economic slump has led to increased activity in the used phone and repair markets, which could potentially hinder total smartphone production growth in Q2. Nevertheless, production is forecasted to grow by about 5% quarter-on-quarter in Q2, to 260 million units. However, due to the unfavorable economic environment, TrendForce forecasts that smartphone production will still fall by 10% year-on-year.