The ongoing coronavirus outbreak has badly impacted global smartphone shipments and the manufacturing of devices. Given the circumstances, many smartphone companies are moving their production and manufacturing units out of China. In the meantime, we safely assume that China may not be the world’s largest smartphone production hub in the years to come.

According to a report published by a market research firm Counterpoint, smartphone production in China has decreased to less than 70 percent. The recent dynamics within the supply chain and production ecosystem could be the key reasons for such a drastic decline in terms of production in China.

As per researchers, smartphone production has been steadily shifting abroad.

“Rising costs, trade tensions with the US, and a re-prioritization of other consumer markets make China less attractive as a production base.”

Counterpoint-Global-Smartphone-Production-in-China-2016-2019
Source: Counterpoint Research

India may not be far from being the world’s largest smartphone manufacturing hub

The US-China trade war is likely to benefit India since many vendors are now considering options like India to continue manufacturing devices in huge numbers. Over the last few years, India has witnessed a surge in smartphone adoption, courtesy of initiatives like ‘Make in India’ policy, which has helped companies reduce devices’ cost.

Samsung has pulled the plug on its smartphone production in China due to rising labor costs and declining domestic market share, which fell below 1% in 2019.

Apple outsources production through Foxconn and Pegatron in China. However, the Cupertino giant is also expanding its manufacturing base into India to benefit the ‘Make in India’ policy.

Chinese OEM OPPO has increased its India production from 15 million units in 2018 to 50m in 2019. OPPO is planning to increase its production to 100 million devices this year.

Last year, Vivo announced its plans to double the India production volume to 50 million this year.

Last but not least, Xiaomi continues to lead the number of smartphone shipments in India while it plans to increase its current production numbers by 50%.