Pandemic and geopolitical tensions serve as a lesson to diversify production sites
As per the latest report, China produced more than two-thirds of the total Handset worldwide in 2021. Though the production trend is similar to the last year’s, an uncertain future lies ahead. Due to the decreasing demand for handsets in China, lower domestic production might result in the coming times. The report also suggests that most of the Chinese OEMs and giants like Apple are planning to diversify their production sites to fulfil local demand through local production.
India, on the other hand, produced around 16% of global handsets and stood in the second position. The country witnessed over a 5% YoY production increase, thanks to the Apple, Xiaomi and OPPO units in the country. While Apple’s decision to produce the iPhone 14 in India gives hope for further growth, the centre’s regulations on cheap Chinese OEMs’ phones might act as a deterrent.
The impact of COVID-19-induced slowdown was evident as the production remained significantly lesser than the pre-pandemic levels. However, brief production highs were observed due to local and seasonal rises in demand.
10% of remaining handset production in 2021 took place in Vietnam. The country has hopes from Apple, which is partly shifting its iPad production to Vietnam and might plan to move some of its iPhone production as well.
The 2022 prospects for the global handset market seem not-so-bright, as the report expects an 8% decrease from 2021. But, the report estimates, that from 2023 onwards, the handset market will maintain a low single-digit percentage growth. As the market touches cost competitiveness and companies diversify their production sites, handset production will boom across the globe.
