The Smartphone ODM Market: Motorola Leads, Samsung Outsource Ratio Declines

The Smartphone ODM Market: Motorola Leads, Samsung Outsource Ratio DeclinesThe practice of smartphone original equipment manufacturers (OEMs) outsourcing design to other companies is prevalent in the industry, particularly among budget and low-end phone manufacturers. According to a recent report by market research firm Counterpoint Research, Motorola topped the list in terms of smartphone ODM design shipments in the first half of 2024

The Smartphone ODM Market: Motorola Leads, Samsung Outsource Ratio Declines

The practice of smartphone original equipment manufacturers (OEMs) outsourcing design to other companies is prevalent in the industry, particularly among budget and low-end phone manufacturers. According to a recent report by market research firm Counterpoint Research, Motorola topped the list in terms of smartphone ODM design shipments in the first half of 2024.

The report reveals that Motorola has a high proportion of outsourced phone designs, making it a leader in the ODM market. It is followed closely by Chinese smartphone brand Xiaomi, where 78% of its phones are designed externally. Other Chinese brands, including VIVO, Huawei, HONOR, and OPPO group, also have a significant share in design outsourcing.

Unlike other brands, South Korean smartphone giant Samsung has a higher percentage of in-house designs. The report indicates that ODM products accounted for 22% of Samsung's smartphone shipments in the first half of 2024, down from 28% in 2022. This figure reflects Samsung's move away from reliance on ODM partners.

Samsung is gradually transitioning its previous reliance on Chinese ODM manufacturers for entry-level models to production in India. This strategy has resulted in a decline in Samsung's share in the sub-$250 market, but its share in the above-$250 market has increased.

Counterpoint Research also notes that Samsung has allocated most of its ODM orders for the first half of 2023 to Shanghai Dragontech, previously held by Wingtech. With the rise of orders from Chinese smartphone brands, Dragontech surpassed Wingtech in the first half of 2024, becoming the largest supplier in the ODM market. The three Chinese companies, Dragontech, Wingtech, and Wintek, account for 75% of the total ODM market shipments.

On the other hand, Apple completely refrains from outsourcing, aligning with its positioning in the high-end smartphone market. Apple has always adhered to a self-research and self-production strategy to ensure the quality and brand image of its products.

Overall, the smartphone ODM market is undergoing change. Some brands, such as Samsung, are reducing their reliance on ODM, shifting their focus to in-house design and production. While other brands, such as Motorola and Xiaomi, continue to rely on ODM to reduce costs and enhance efficiency. In the coming years, the smartphone ODM market will continue to evolve and adapt based on market trends and competitive landscape.