This year's smartphone production volume is expected to decrease by 1% compared to last year. This is due to the impact of the tariff policy of the Donald Trump administration and a global industry slowdown.
On the 11th, market research firm Counterpoint Research released this outlook through its global smartphone production tracking report. Last year's smartphone production increased by 4% compared to the previous year, but it is analyzed that this growth is expected to decline this year.
Last year, more than 90% of the world's smartphone production came from China, India, and Vietnam. However, this year, production trends in various countries are showing diverging patterns, indicating an overall market slowdown.
The Chinese market is affected by the U.S. government's tariff policy. As a result, Counterpoint forecasts a decrease in smartphone production along with poor performance in the domestic market.
Ivan Lam, a senior research analyst at Counterpoint, noted, "While the global changes in smartphone production have accelerated after the COVID-19 pandemic, tariffs are impacting the entire industry from component suppliers to importers and distributors as well as manufacturers.” He diagnosed that “smartphone brands have no choice but to diversify their production bases from China to other countries.” He added, “The biggest beneficiary is India, with significant growth potential,” and said, “Vietnam, which is geographically close to China and has developed contract manufacturing and export infrastructure in the consumer electronics sector, is also expected to benefit.”
India is cited as the largest beneficiary of the U.S. tariff policy. According to Counterpoint's analysis, India is expected to record double-digit growth this year according to export demand from Samsung Electronics and Apple. India is projected to account for 20% of the global smartphone production this year. Vietnam is also expected to continue its growth centered around Samsung and Motorola.
Prachi Singh, a senior research analyst at Counterpoint, analyzed, "As traditional global electronic manufacturing services (EMS) giants continue to invest in India, manufacturing capabilities have significantly improved," and noted, "They can now meet higher production demands." She added, "The overall manufacturing ecosystem in India is continuously expanding, and local manufacturing capabilities are improving in terms of production yield and complexity." She explained that "the Indian government is also encouraging companies to invest in India and local production by recently introducing the Electronic Components Manufacturing Support policy (ECMS) to activate the component ecosystem."
Neal Shah, a research analyst at Counterpoint, said, "If Apple really produces iPhones in U.S. factories, given that all conditions are not yet in place, the price is expected to increase by at least 15-20% ($150 to $200)." He added, "The increase in expenses is mainly due to differences in labor costs, factory investment costs (depreciation of capital investment), and logistics costs."