Supply Chain Research

U.S. smartphone sales may have had a tough time in August and early September. Panjiva data shows imports fell 5.6% in August compared to a year earlier to 18.9 million handsets. That was the third month of declines, albeit admittedly during the quiet period before late-September sales of the new Apple iPhone 8 began. This year may be different to prior years however with the flagship iPhone X not being released until November. A return to growth may be slower early in the year before accelerating later.

Looking at individual countries there was a notable 86.8% slump in shipments from Taiwan. That likely reflects retooling ahead of the launch of Google’s Pixel 2 range in mid-October. Imports from South Korea and Vietnam meanwhile increased by 2.1% – an approximation for shipments by Samsung Electronics and LG Electronics. That includes a 38.3% rise in shipments from South Korea, indicating a strong ramp-up in production of the 8-series phones.

The good news for all manufacturers is that the average import value of phones remains robust. That includes a 10.9% increase overall including a 13.8% increase in handsets shipped from China. Interestingly the import from South Korea and Vietnam fell 2.0%, suggesting Samsung’s mix in the 8-series may include more of the lower priced handsets.

Chart compares change in U.S. phone handset imports on a year earlier, segmented by country of origin. Source: Panjiva

Globally though the growth in the value of handsets shipped looks to have continued. Chinese exports increased by 10.7% in August (phones delivered to customers in mid-August through mid-September after two months of minimal growth. That includes shipments to the U.S. that increased by 19.0%, while demand in Japan remains weak after a drop of 16.5% compared to a year earlier.

Chart shows Chinese exports of products categorized HS 8517.12, segmented by destination Source: Panjiva

Samsung’s growth can be seen in the exports from its Chinese factories, which jumped 45.1% on a year earlier in August. Meanwhile among the Apple supply group there was an 8.3% increase, split between Pegatron which saw a 49.1% rise, and Foxconn’s 8.8% slide. It should be noted though that both also produce handsets for other manufacturers too.

Data for exports from China of products categorized HS 8517.12, filtered by names of companies and known affiliates Source: Panjiva