.png){kind=logo}
China's Smartphone Crown Slips as Supply Chains Migrate
Published: 1.3.2024
Key Takeaways:
China's smartphone production plummets by 521 million units in 7 years due to supply chain migration.
US-China trade war fuels the shift towards India and Southeast Asia.
China's global market share dips below 60%, with a projected further decline to 50%.
Proactive industrial and technological advancements are crucial for China's continued competitiveness.
China’s smartphone production staggered, as a mass of supply chains moved to India and Southeast Asia affecting its yearly output. Chinese media outlet Yicai reports a staggering 521 million unit decline in smartphone production within just seven years, marking a major shift in the global industry landscape.
The primary catalyst for this migration lies in the protracted US-China trade war, prompting manufacturers to diversify their production bases. Countries like India and Vietnam, with their lower labor costs and growing infrastructure, have become increasingly attractive alternatives.
The consequences are demonstrably impactful. Yicai reports China's global smartphone market share dipped below 60%, with analysts predicting a further descent to 50% in the coming years. Major contract losses and shifting production centers, evident in moves by industry giants like Apple and Samsung, are behind this decline.
Adding weight to the gravity of the situation is Gao Shiwang, the China Chamber of Commerce for Import and Export of Machinery and Electronic Products spokesperson. Yicai quotes him acknowledging the trend's severity and emphasizing the need for China to "proactively adapt its industrial structure and upgrade its technology" to preserve its competitive edge.
The repercussions of this shift are far-reaching. For China, it means not only lost production and jobs but also potential economic deceleration. Meanwhile, India and Southeast Asia stand to benefit, attracting investments and bolstering their technology sectors.
This migration is not without its challenges. Infrastructure hurdles and a skilled labor shortage still plague some emerging production hubs. Regardless, the trend's momentum is undeniable, and its repercussions for the global smartphone landscape will be keenly monitored in the years ahead.
