Global smartphone production took a nose dive in the first quarter, dropping more than 20 percent sequentially overall and as much as 40 percent both sequentially and year over year for individual manufacturers, a new report from TrendForce indicates.
According to the report, much of the 23 percent drop from the previous quarter can be attributed to the regular post-holiday season cycle. But market demand in the second quarter is expected to be slack despite flagship launches from Samsung, LG, and Huawei.
“The market demand going into the second quarter is expected to remain relatively weak as consumers are holding off their purchases in anticipation of the 10th anniversary iPhone devices that will arrive in the third quarter,” TrendForce’s report noted. “Smartphone sales will be fairly lackluster until the second half of this year.”
Credit: TrendForce
By manufacturer, TrendForce said Samsung was the only brand to post production growth in the first quarter, spurred on by strong sales of its Galaxy J series. Despite the launch of its Galaxy S8 last month, TrendForce said Samsung is expected to post flat growth and hold production volumes mostly stable in the second quarter.
Rumors swirled about Apple’s decision to cut production volumes earlier this year, and TrendForce said production volumes did indeed drop 36 percent sequentially as well as 41 percent year over year. Interestingly, TrendForce noted this move actually coincided with a boost in iPhone sales. The report indicated Apple is expected to produce 43 million units in the second quarter, which represents a decline of 17 percent from the first quarter. This dip is slated to come ahead of the highly anticipated launch of the 10th anniversary iPhone in the third quarter.
LG’s production volume also fell off a cliff in the first quarter, dropping 40 percent sequentially. TrendForce said production volume is expected to hit around 18 million units in the second quarter, remaining relatively flat year over year. Even up and comer Huawei saw production volumes drop by 22 percent sequentially in the first quarter, though the company is expected to return to growth in the second quarter on the strength of its P10 handset.
The firm also estimated global smartphone production volumes overall in the second quarter will come in with a “modest single-digit growth versus the preceding three-month period.”
