Now, in a new report by CalculationPoint Research, it has been revealed how much smartphone manufacturers depend on outsourcing their designs with a share of outsourced smartphones shipped by every brand in 1st half of 2024.
Table of Contents
Motorola Tops the Outsourced Smartphones List
Apple focuses on high-end devices and has no low-cost model because it outsourced none of its device designs. Usually, brands outsource to create more economical gadgets, but Apple is still focused on the high-end. Meanwhile, the king of Android brands, Samsung saw 22% of its phones outsourced, down from 28% in 2022. Samsung has been bringing production from Chinese ODMs (original device manufacturers) towards its own facilities in India The firm has also witnessed an increase in the $250+ category but has lost share in the sub-$250 range, marking a general shift to in-house designs for mid-tier and flagship devices.
Then came OPPO and HONOR, with design outsourcing reaching 39 percent and 40 percent of their total shipments respectively. Such brands depend more on ODMs for the production of low-end and mid-range phones. By outsourcing, they can keep costs down and devote their energies to innovating and customizing their products.
On the further end of the spectrum, Motorola and Xiaomi depend much more heavily on outsourced designs. Despite being the leader in the first half of 2024, over 90% of shipments associated with Motorola were actually outsourced, and close to 80% with Xiaomi. Essentially both vendors cater to the budget segment, so outsourcing increases production, increases margins, and helps to put out devices at cost-effective prices.
To sum up, premium brands such as Apple or Samsung provide all the hardware and software to avoid the lack of control and focus on design and quality but on the opposite budget-oriented brands like Motorola & Xiaomi will always use the outsourcing of ODM to make a cheap smartphone. And it emphasizes how outsourcing assists the brands to cater to the demands of various market segments.
FAQs
What is an ODM phone?
An ODM phone is designed and made by another company and then sold under a different brand name.
Why do Xiaomi and Motorola outsource?
They outsource to cut costs and offer affordable phones, especially in the budget segment.
