India Accounted For 16% Of Global Handset Production In 2021
Production in India rose more than five per cent year-on-year, driven by Apple, Xiaomi and OPPO, said a report
India accounted for 16 per cent of global handset production in 2021. Production in India, the second largest geography in terms of production volume, rose more than five per cent year-on-year, driven by Apple, Xiaomi and OPPO.
"Taking into consideration Apple's plan to produce the iPhone 14 in India, the country's contribution will continue to rise. However, the Indian government's regulations on low-priced phones made by Chinese OEMs might slow down this trend," said a Counterpoint report on Global Handset Production.
According to reports, recently, the Indian government has considered restricting Chinese smartphone manufacturers from selling phones under INR12,000 or $150. The idea is to boost the domestic smartphone market.
The global handset production in 2021 was similar to that a year ago. Although there was a brief rise in production in some regions due to the release of pent-up demand, the negative impact of the COVID-19 pandemic remained throughout the year and did not allow recovery to pre-pandemic levels, the report added.
China contributed to 67 per cent and Vietnam accounted for 10 per cent of total global handset production in 2021. Despite Samsung's increased production in Vietnam, the withdrawal of LG's smartphone business from the country had a negative effect on production volume, resulting in only a slight increase in production compared to the previous year. As Apple is moving some of its iPad production to Vietnam, the company might transfer some of its iPhone production too, which will then boost overall handset production volume in the country, the report added.
Over the past five years there's been a clear shift across major vendors to diversify beyond China, with Samsung leading this charge and Apple following suit.
In 2020, Huawei accounted for a big portion of China's total production. Unlike Huawei, which mostly manufactures its handsets domestically, other Chinese OEMs are seeking to diversify their production sites to fulfill local demand through local production. Apple, which has a high proportion of production in China, is also looking to diversify its production sites. With diminishing demand for handsets in China, the proportion of Chinese production is also expected to decline in the future, the report pointed out.
The smartphone industry has been plagued by multiple issues such as component shortages, inflation, increasing competition in the entry-level segment and inventory issues. However, with the availability of the 5G network, the industry looks bullish and by the end of 2022 there will be a surge in demand for 5G smartphones.