Outsourcing in smartphone design: Motorola, Xiaomi and Vivo among the leaders

According to Counterpoint Research, many major smartphone manufacturers are outsourcing the design of their devices rather than developing them themselves. The leader in terms of outsourcing share was Motorola: 90% of its models released in the first half of 2024 are designed by third-party firms. In second place is Xiaomi with 78% of its devices designed in-house, followed by Vivo with 52%.

This trend is particularly noticeable among Chinese brands producing budget and mid-range models, which often require rapid development and time-to-market with cost constraints. Counterpoint Research forecasts the outsourcing market to grow at a CAGR of 6% in the first half of 2024, driven by the increased demand for budget and mid-budget devices.

How other companies are using outsourcing

• Huawei outsources development for about 44% of its devices.
• Honor and Oppo Group also outsource extensively, with shares of 40% and 39% respectively.

Apple remains an exception: the company designs all of its devices exclusively in-house, strictly controlling each step. Samsung, on the other hand, outsources 22% of its models, although this figure is gradually decreasing. This is because Samsung is strengthening its manufacturing in India and is looking to control quality in the budget segment, where it had previously outsourced.

Samsung has been using in-house design for 22% of its models.

Looking to the Future

Counterpoint expects the outsourcing market for smartphone design to continue to grow. Chinese brands’ desire to remain competitive in the budget and mid-budget segments is contributing to the fact that they continue to actively outsource design companies to speed up the time-to-market of new models and reduce costs.

Counterpoint expects the smartphone design outsourcing market to continue to grow.