Motorola leads smartphone giants that outsource design as Samsung keeps control
HONG KONG, CHINA — In the first half of 2024, Motorola emerged as the Android brand most reliant on outsourced designs.
According to a report by global industry analysis firm Counterpoint Research, 90% of Motorola’s smartphone shipments came from its external manufacturers.
The company primarily partners with Dixon Technologies, a major Indian ODM (original design manufacturer), to produce its devices. This heavy reliance on outsourcing follows Lenovo’s acquisition of Motorola Mobility, allowing the brand to focus on cost-effective production for budget smartphones.
Xiaomi close behind with Wingtech and Dixon
Xiaomi is not far behind, with nearly 80% of its smartphone designs being outsourced during the same period.
Xiaomi partners with Wingtech, one of the largest ODMs, and Dixon Technologies for its production needs. This strategy allows Xiaomi to remain competitive in the budget segment by leveraging cost-efficient manufacturing processes.
OPPO and HONOR: Moderate outsourcing strategies
Both OPPO and HONOR maintain moderate levels of outsourcing, with around 40% of their smartphone shipments being designed by external partners.
OPPO is currently in talks with several Indian manufacturers, including Dixon Technologies, Lava International, Optiemus, and Micromax, to expand its outsourcing efforts.
HONOR, on the other hand, works closely with Longcheer and Wingtech, two of the industry’s top ODMs.
Samsung: Least reliant on outsourcing
Samsung stands out among Android brands for its minimal reliance on outsourced designs. Only 22% of Samsung’s smartphones were outsourced in the first half of 2024, a decrease from 28% in 2022.
The company has been gradually shifting production from Chinese ODMs to its own facilities in India and Vietnam.
Key partners for Samsung’s outsourced production include Wingtech, Hwaqin, and Longcheer for Chinese manufacturing, while Hansol Technics and Dreamtech handle production in Vietnam.
Understanding ODM in smartphone manufacturing
Original design manufacturers (ODMs), also known as manufacturing outsourcing companies, design and manufacture products for other brands to sell under their own names.
In the smartphone industry, ODMs handle everything from initial design concepts to final assembly, allowing brands to reduce costs and speed up time-to-market. This differs from traditional contract manufacturing, where brands provide their own designs for production.
Strategic focus on budget devices
The high outsourcing rates among brands like Motorola and Xiaomi reflect a common strategy to maintain profitability in the competitive budget smartphone market.
Android Authority explained that “brands typically utilize outsourcing for budget devices in a bid to improve profitability.”
This allows them to focus internal resources on higher-end models while keeping costs low for entry-level devices.
