Global Smartphone Production Gets Highest QoQ Growth in Recent Years

In 3Q20, the smartphone industry benefitted from the gradual easing of pandemic containment measures worldwide, the arrival of year-end holiday season, and the expanded production targets by smartphone brands looking to capture Huawei’s lost market share, according to TrendForce. These factors together drove up global smartphone production to 336 million units in 3Q20, a 20% increase QoQ, which is the highest QoQ growth in recent years.

Looking ahead to 4Q20, TrendForce believes that the Huawei sanctions will continue to influence the smartphone market. The competing brands will remain aggressive in component procurement and maintain a high production level.

In Q3-20 Apple posted a small QoQ increase of 2% in its iPhone production to 42 million units for 3Q20. This result mainly has to do with the delay in the launch of the iPhone 12 series.

Regarding 4Q20, Apple will substantially improve its performance. Although the models under the 12 series have a higher BOM cost than the models under the 11 series due to the inclusion of the 5G capability, Apple uses the same proactive pricing strategy of last year to improve sales in the high-end market segment that has been impacted by the pandemic. At the same time, Apple is going to capture some of the demand that was originally intended for Huawei’s devices.

As such, TrendForce estimates that Apple’s iPhone production in 4Q20 will reach 74.1 million units or potentially more. The TrendForce chart below shows Apple roaring back in iPhone shipments with an estimated 21.1% market share which will show Apple at the number one global leader for Q4 if the estimates hold true.

With the exception of Apple, the global smartphone production for 4Q20 is estimated to reach 351 million units, showing a QoQ increase of 4%. The quarterly production volumes in the second half of this year are expected to be lower compared with the same period last year. However, the quarter-over-quarter comparisons are showing a gradual recovery from the slump caused by the COVID-19 pandemic.

Lastly, TrendForce expects global smartphone production for 2020 to reach 1.25 billion units, registering a YoY decline of 11%. The global production for 2021 is currently forecasted to increase by 9% YoY to 1.36 billion units. In the aspect of industry development, smartphone brands have been focusing on 5G this year, which will continue to be the main theme of 2021.

As suppliers of mobile SoCs expand their 5G solutions for mid-range and low-end smartphones, the share of 5G models in the annual global smartphone production is forecasted to grow rapidly from around 20% this year to 40% next year.

December 03, 2020