Taiwan's share of smartphone assembly business down in Q1

CNAMay 29, 2016, 12:16 am TWN

TAIPEI -- Taiwan witnessed its share of the global smartphone assembly business fall in the first quarter of this year amid escalating competition in the world market, market information advisory firm International Data Corp. (IDC) said Saturday.

According to IDC, Taiwan's share of the global smartphone assembly industry fell to 23.4 percent in the January-March period, down from 28.5 percent recorded in the fourth quarter of last year.

However, China expanded its presence in the sector during the first quarter, the IDC said. China's share of the global smartphone assembly industry rose to 44.1 percent in the three-month period from 40.1 percent seen in the previous quarter.

Kao Hung-hsiang, a senior research manager with IDC, said that China's smartphone assembly industry got a boost from an increase in shipments of first-tier Chinese smartphone brands.

Kao said that smartphone brands in the United States, Europe and Japan reduced their outsourcing orders and also increased their in-house production in a bid to cut costs and take on rising competition, and under such unfavorable circumstances, Taiwan's smartphone assembly firms saw their orders fall in the first quarter.

In addition, Taiwan's smartphone production in terms of volume for the first quarter fell 14.9 percent from the fourth quarter of last year, the IDC said.

In the January-March period, Samsung Electronics Co. of South Korea retained its title as the largest smartphone assembler in the world, immediately followed by Taiwan's Hon Hai Precision Industry Co. (鴻海) and Pegatron Corp. (和碩). The two Taiwanese firms' first quarter rankings in the first quarter were unchanged from the previous quarter, the IDC data showed.

Right after Pegatron, China's OPPO ranked as the fourth largest smartphone assembler in the first quarter, ahead of China's VIVO (No. 5), South Korea's LG (No. 6), China's Huanqin (No. 7), ZTE (No. 8), Flex (No. 9) and Goldex (No.10), the IDC said.

The major clients of Taiwan's smartphone assemblers include Apple, Sony, Microsoft and BlackBerry but these companies suffered a slowdown in sales in the first quarter, the IDC said. The advisory firm added that Taiwan's share of the global smartphone assembly business could continue to fall since Taiwanese firms tend to take offers from clients which roll out mid-to-high end models on a smaller production scale, but these models are expected to provide Taiwanese makers with a higher profit margin.

Source: Taiwan's share of smartphone assembly business down in Q1