Outsourcing of handset manufacturing is steadily growing. The outsourced manufacturing business model accounts for more than half of all handsets manufactured.  Contract Electronics Manufacturers (CEM) are seeing healthy growth as phone vendors shift volumes to save costs, with India on the rise as a major growth area for contract manufacturing.  This is part of a longer-term trend, and while the Covid pandemic accelerated it, it predates the coronavirus and will continue to grow in coming years.

In 2017 Hon Hai (Foxconn, FIH Mobile) surpassed SAMSUNG as the largest handset manufacturer in the world. Apple is the biggest user of contract manufacturing.

Samsung has historically outsourced only feature phones but has recently been changing its strategy regarding outsourcing and has increased the number of smartphones it does with CEMs. Nevertheless, Samsung will remain the second largest (or largest, depending on the year) handset manufacturer in the world.

Demand for feature phones is still healthy especially in the Africa and parts of South-East Asia. India has become an important country for contract manufacturers as vendors like Xiaomi, Realme, Oppo, Vivo, Lenovo and others have partnered with contract manufacturers to produce handsets locally for the Indian market.

Clients of our Device Technologies (EDT) service can learn more about the CEM / EMS / ODM market and trace shipments by vendor from 2005 to 2023 here.