Despite an influx of orders in the first quarter, Apple’s iPhone is still struggling to avert the current downward sales trend, according to market research institute, TrendForce.

The iPhone currently holds a 40% market share in the American market, yet a major proportion of its production is located in China. Apple is still heavily reliant on major OEMs such as Foxconn, Pegatron etc., all of which have no plans to relocate their facilities in the short term. Whereas Samsung has established a significant production base in Vietnam, having invested a whopping US17.3 Billion in factories and R&D, as of last year.

With the recent tariff hike on US$325 billion worth of imports from China, including smartphones, notebook PCs, monitors and many daily necessities, Apple will be most affected among other smartphone brands. TrendForce predict that due to the significant role that Apple plays in the American economy, Apple are likely to receive exemptions for their products. The U.S. Government apply other modes of tariffs in order to mitigate the damage done to Apple, according to TrendForce.

China has also declared a tariff of 5%-25% on US$60 billion worth of American produce and daily necessities on May 13, Taipei Time. Although these tariffs did not extend to electronic components, the global economy is feared to have been derailed as the world's two economic superpowers ramp up their trade ware.

How do the Smartphone brands rank?

TrendForce's ranking of smartphone brands by production volume for Q1 2019 shows that the top six global brands, in order, were Samsung, Huawei, Apple, OPPO, Xiaomi, and Vivo.

Despite the depression in demand, top contender Samsung showed no noticeable fluctuations in production, thanks to the release of its flagship Galaxy S10 and stable sales across regional markets. Samsung's production volume for Q1 2019 totalled 72.5 million units, at a level similar to the year before, while their second season sales are forecast to reach 73.5 million units, not budging by much QoQ.

TrendForce Phone Production

(Source: TrendForce)

Huawei not only took second place in production rankings for Q1 2019 but was also the biggest overall winner for the period. Besides the strong market performance of its Mate series, Huawei also benefited from increased sales in Latin America and the Middle East.

Another reason for their meteoric rise was that Huawei has further built up its component inventories in anticipation for any fallout from the US-China trade dispute. Its production volume grew by nearly 44% YoY to 60.5 million units (Huawei's own shipment tally shows 59.1 million units).

As for Apple's iPhone devices, the worldwide sales of its latest models have been lower than expected, mainly because of slightly higher pricings. China, previously one of the main battlegrounds for Apple's high-end phones, saw Q1 sales plummet by 26% YoY to 41.5 million units due to the double whammy of the US-China trade war and the increasing competition from Huawei's high-end smartphones. Apple slid to third place globally. Although increasing orders for iPhone XR will sustain Apple during the second quarter, consumers are generally predicted to look on in the meantime.

OPPO, Xiaomi, and Vivo took fourth, fifth, and sixth place respectively. These three Chinese brands face the same predicaments: The three brands are domestically hard-pressed by Huawei, while faced with an overall saturated market that is impeding their efforts to turn the tables.

Regarding the individual performances of the three brands, OPPO's production volume for Q1 dipped by 4% YoY to 26.8 million units. OPPO's production volume for Q2 is forecasted to be on par with the result for the same period last year, totalling around 30.5 million units.

Fifth-placed Xiaomi focused on reducing its inventory of whole devices in Q1. Its production volume for the period dropped by 17% YoY to 24.5 million units. Xiaomi now relies heavily on overseas markets to boost its quarterly performance, as domestic sales continue to weaken.

Sixth-placed Vivo raised its quarterly production volume by more than 10% YoY in Q1 to a total of 21.8 million units. After bringing its inventory under control at the end of 2018, Vivo was able to post an admirable production performance for Q1. For Q2, Vivo is forecasted to increase its production volume from the prior quarter to a total of 27.2 million units with the recovery of the global market and the release of new devices.