Nikkei: Xiaomi, vivo and OPPO reduce smartphone orders by 20%

On May 18, Nikkei Asia reported that after more than a month of epidemic lockdown, China's leading smartphone makers have told suppliers that orders in the coming quarters will be reduced by about 20% from previous plans.

People familiar with the matter said Xiaomi has told suppliers that it will lower its full-year forecast to around 160 million to 180 million units from its previous target of 200 million units. Xiaomi shipped 191 million smartphones last year and aims to become the world's leading smartphone maker. However, the company may adjust orders again in the future as it continues to monitor supply chain conditions and consumer demand in the domestic market.

In addition, suppliers revealed that vivo and OPPO have also reduced orders for this quarter and the next quarter by about 20% in an attempt to digest the excess inventory currently flooding retail channels. These sources said that vivo even warned some suppliers that it would not update the specifications of key components of some mid-range smartphone models this year, citing efforts to reduce costs amid inflation concerns and reduced demand.

However, sources said Honor, a former subsidiary of China's Huawei, has not revised its order plan of 70 million to 80 million units this year. The smartphone maker has recently recovered its domestic market share and is actively pursuing overseas expansion in 2022.

The report pointed out that Xiaomi, OPPO and vivo have all benefited from the US crackdown on Huawei. According to IDC data, Xiaomi climbed to the world's third largest smartphone manufacturer for the first time last year, with a market share of 14.1%, compared with 9.2% in 2019. In the second quarter of last year, it even surpassed Apple to become the world's second largest smartphone manufacturer.

But the tailwind seems to be fading. In the first three months of this year, although Xiaomi still ranked third in the world, its shipments fell 18% year-on-year. Meanwhile, OPPO and vivo's shipments fell 27% and 28% year-on-year, respectively. In the domestic market, Xiaomi fell from third to fifth in the quarter.