Q1 smartphone production increases, Q2 decline expected

Suppliers significantly reduced production targets in the first quarter of last year to address severe inventory accumulation in channels. Consequently, even though 1Q24 smartphone production was below pre-pandemic levels of over 300 million units, it still achieved a seemingly impressive 18.7% YoY growth, with a total shipment of 296 million units, according to TrendForce.

Global consumer spending has been constrained by high inflation and geopolitical conflicts, leading to a more conservative approach. Additionally, aggressive production by some brands in the first quarter has resulted in elevated channel inventories that need to be adjusted first. Consequently, TrendForce is not optimistic about production numbers for the second quarter, forecasting a decline of 5–10% compared to the previous quarter.

In the first quarter, the global top six manufacturers by production market share were Samsung, Apple, Xiaomi, OPPO, Transsion, and Vivo. Together, these companies accounted for nearly 80% of the market share.

Samsung produced a total of 59.5 million units in the first quarter, securing the top market share. However, due to the underperformance of the A series in overseas markets, production in the second quarter is expected to decline to below 55 million units — with a potential drop of over 10%.

In the first quarter, Apple faced a decline in sales in the Chinese market, resulting in a drop in annual production to 47.9 million units. This decline prompted several adjustments within the component supply chain, although production plans for processor chips remained unchanged. TrendForce posits that the second quarter falls within a product iteration gap for Apple, and production is expected to decrease by approximately 10%.

Xiaomi (which includes Xiaomi, Redmi, and Poco) has moved past last year’s high inventory issues, achieving a total production of 41.1 million units in the first quarter and ranking third globally in market share.

Oppo (including Oppo, OnePlus, and Realme) produced a total of 33.8 million units in the first quarter, ranking fourth in market share. The brand faced significant competition in China from Honor, which impacted its sales despite slight growth in emerging markets like India. As a result, Oppo’s YoY growth in the first quarter lagged behind other Android brands with lower bases. However, following a lost patent lawsuit against Finnish telecom giant Nokia and a subsequent settlement, Oppo is set to return to the German market in the second half of the year.

Transsion continued its optimistic momentum from last year’s nearly 50% YoY growth into the first quarter of this year. The brand produced approximately 29.8 million units in the first quarter, achieving impressive annual growth and ranking fifth globally. However, the aggressive production in Q1, coupled with overlapping low-end market competition with Samsung, Xiaomi, and Lenovo, led to inventory accumulation. TrendForce predicts a decline of at least 15% in Transsion’s production for the second quarter.

Vivo (including Vivo and iQoo) produced and shipped 21.7 million units in the first quarter, ranking sixth in market share. For the second quarter, Vivo plans to release extended models of its flagship X100 series and capitalise on the 618 shopping festival, aiming to sustain its first-quarter production levels.