U.S. September Factory Orders Report – Electronics Related Shipments, Orders and Inventories

The U.S. Commerce Dept. released data on shipments, orders and inventories of domestically manufactured goods. General weakness was apparent across the electronics supply chain:

  • Chart 1 summarizes the annualized (12/12) and 3-month (3/12) growth of the domestic electronic supply chain in September. 
  • Electronic equipment 3-month average book/bill dropped to below parity (chart 2).
  • Orders and shipments declined into contraction on a 3/12 growth basis (chart 3) as both monthly orders and shipments declined on a total dollar basis (chart 4).
  • Monthly orders for all electronic equipment categories were either relatively flat or declined in September (chart 5).
  • Electronic equipment monthly order product mix is shown in charts 6 & 7.
  • Electronic equipment inventories by product are shown in chart 8.
  • The ratio of total electronic equipment inventories/orders is rising which is common in times of weakening demand (chart 9).
  • Military electronics orders and shipments are weakening (chart 10).
  • Electromedical, measurement and control equipment orders and shipments peaked in late 2018 and have been generally declining (chart 11). They represent the largest domestic equipment category.
  • Vehicle shipments were flat in September (chart 12).

Source: www.census.gov

Worldwide Smartphone Shipments Rose 0.8% in Q3 (Chart 13)

Worldwide smartphone shipments increased 0.8 percent year-over-year in the third quarter of 2019 reversing seven quarters of decline, according to International Data Corporation (IDC). In total, companies shipped a total 358.3 million smartphones during the quarter, up 8.1 percent from the previous quarter and enough to return the industry to positive growth.

Digging into the growth areas, India led emerging markets in total, which together were responsible for propelling worldwide growth, mainly from the rise of Chinese brands.

In China, greater consolidation toward the top five brands was the main trend in the quarter. The top Chinese brands all increased their local shipments in preparation for Nov. 11 or “Singles’ Day,” the Chinese equivalent of Black Friday for shopping in the U.S.

“Despite facing challenges across many international markets, Huawei doubled down on China in the third quarter,” said Melissa Chau, associate research director with IDC’s Worldwide Mobile Device Trackers. “Samsung benefited the most internationally from Huawei’s woes, ramping up the more affordable A series, while in China the other domestic competitors felt the heat from Huawei.”

“The market returning to positive growth shows the resilience of this industry as well as the ongoing demand for mobile phones, all in the face of many global macroeconomic challenges,” said Ryan Reith, program vice president with IDC’s Worldwide Mobile Device Trackers.

“The number of factors in play for competition is incredible. It is clear Huawei continues to make big gains in China, which remains the world’s largest market. Apple beat many expectations and is driving strong volumes in mature markets that face equally challenging headwinds,” Reith said.

“And most importantly, the top five OEMs accounted for more than 70 percent of the world’s smartphone shipments for the first time ever this quarter. The industry and vendor landscape is still changing but the trend of consolidation is ramping along with it,” Reith said.

Source: www.idc.com

Smartphone Company Highlights

Samsung gained share in 3Q19 with annual growth of 8.3 percent on the back of the Galaxy Note 10 launch in August and increased A Series volumes, with a total of 78.2 million smartphones shipped. The lower-end to midrange A Series in particular helped to fill in the gaps left behind by Huawei.

Huawei shipped higher volumes than expected as it shifted focus to its domestic market, particularly in lower-tier cities, and increased inventories given the unknown future with Google Mobile services.

While a sentiment of nationalism has helped to bolster Huawei in China, solid relationships with the local channel players has been key, offering favorable distributor terms and a well-rounded product portfolio. Nevertheless, there will be challenges ahead with 4G inventory to clear while consumers wait for affordable 5G products to hit the market.

Apple shipped 46.6 million iPhones in 3Q19, which was a slight decline year over year but still better than most expectations. Apple continues to sell some refurbished iPhones via its own channels, which sustain and possibly grow the installed base, but also impact iPhone revenues. Newer iPhones, specifically the iPhone 11s and XR, did very well this quarter, capturing strong share in important markets like the U.S. and Western Europe.

Xiaomi for the first time saw less than a third of its shipments delivered domestically in China, which was second to India in volume. Domestically, despite its launch of the CC series to appeal to young female consumers, shipments declined under pressure from Huawei. The runway was clearer for Xiaomi in India, however, where it strengthened its offline presence by expanding its sales network via the Mi Store and Mi Preferred Partners.

OPPO also focused its attention outside of China as it approached the tipping point of nearly half of its shipments outside of China with domestic shipments focused on the Reno series and the A9. India experienced the strongest momentum internationally where the Reno series helped complete its product portfolio with higher-end offerings while the online-exclusive K series strengthened its online presence.

Source:  www.idc.com

Global Smartwatch Shipments Increased to 14M Units in Q3 (Chart 14)

According to Strategy Analytics, global smartwatch shipments grew an impressive 42 percent year-over-year to reach 14 million units in the third quarter of 2019.

Apple Watch maintained first position with 48 percent global smartwatch market share, while Samsung held second place, and Fitbit clung on to third.

Global smartwatch shipments grew an impressive 42 percent annually from 10 million units in Q3 2018 to 14.2 million in Q3 2019. Smartwatch growth continues to soar, as consumers increasingly accessorize their smartphones with fitness-led and health-focused wearables.

Apple shipped 6.8 million smartwatches worldwide in Q3 2019, rising an above-average 51% from 4.5 million in Q3 2018. Apple Watch remains a long way ahead of the chasing pack and its global smartwatch market share has grown from 45 percent to 48 percent in the past year. Apple Watch continues to fend off strong competition from hungry rivals like Fitbit and Samsung. Apple Watch owns half the worldwide smartwatch market and remains the clear industry leader.

Samsung shipped 1.9 million smartwatches worldwide in Q3 2019, almost doubling from 1.1 million a year ago. Samsung’s global smartwatch market share has jumped from 11 percent to 13 percent during the past year. Samsung is firmly established as the world’s number two smartwatch vendor. Recent new models, such as Galaxy Watch Active 2, should enable Samsung to improve its global smartwatch presence during the upcoming Q4 holiday season.

Fitbit shipped 1.6 million smartwatches worldwide in Q3 2019, inching up slightly from 1.5 million in Q3 2018. However, Fitbit’s global smartwatch market share fell to 11 percent this quarter, down from 15 percent a year ago.

Fitbit continues to underperform the smartwatch industry average, struggling to compete with Apple Watch at the higher end of the smartwatch market, while its latest Versa Lite model has struggled to excite consumers at the lower end. Fitbit’s recent takeover by Google will be a relief to the company, currently under rising competitive pressure from Apple, Samsung, Garmin, Huawei, Xiaomi and others.

The big question now on everyone’s lips is what Google plans to do with Fitbit, and whether Google will expand or contract Fitbit’s famous hardware, operating system, and healthcare, sport and fitness services.

Source: www.strategyanalytics.com

44.32M Tablets Shipped Worldwide in Q3’19

Global tablet shipments for the fourth quarter of 2019 are expected to increase 4.5 percent to the same level recorded in the third quarter, as both Apple and non-Apple brand vendors are likely to see their shipments pick up in the quarter, according to Digitimes Research.

Worldwide tablet shipments amounted to 44.32 million units in the third quarter, representing a sequential surge of 35.5 percent and an annual expansion of 1.5 percent.

Besides the seasonality effect, two more reasons can explain the sharp sequential shipment growth for the third quarter, Digitimes Research said. One is that U.S. imposition of extra tariffs on China-sourced tablets prompted vendors to ask ODMs advance shipments delivery. The other is that Huawei managed to boost its shipment volumes starting in the second half of the year to offset poor shipment performance in the first half.

In terms of third-quarter shipment rankings, Apple firmly retained the top spot, followed by Amazon, Samsung, Huawei and Lenovo, with Microsoft taking the sixth place with less than 1pp behind the fifth. The rankings are expected to see a slight shakeup in the fourth quarter, with Samsung to return to the second notch and Amazon back to the third place.

With Apple releasing 10.2-inch inexpensive iPad to replace old 9.7-inch model, shipments of 10.x-inch models rose to over 60 percent of total global tablet shipments for the third quarter, and the ratio is expected to pick up further to near 70 percent in the fourth quarter.

Source: www.digitimes.com


Walt D. Custer

Walt Custer

Walt Custer is an industry analyst focused on the global electronics industry. Prior to forming Custer Consulting Group he was Vice President of Marketing and Sales for Morton Electronic Materials, a global supplier of specialty chemicals and process equipment for the PCB industry.

Custer has been a member of the IPC trade organization since 1975 where he received both the President's and the Raymond E. Pritchard Hall of Fame Awards. He is currently a member of the IPC Executive Market & Technology Steering Committee. Custer is also a Director of the EIPC European PCB trade organization.

He authors regular “Market Outlook” columns for Global SMT & Packaging magazine, the Journal of the HKPCA and the TTI MarketEYE website.

View other posts from Walt D. Custer. View other posts from Walt D. Custer.

News & Information

Lead Time Trends
Current average manufacturer lead times for parts you depend on

Supply Chain News
Coverage of global conditions impacting manufacturers

Raw Materials Prices
Trends in feedstock metals, oil and other key materials

Podcasts

Listen to our new podcast, TTI Distribution Download! TTI Specialists, supplier partners and more share their expertise and insight on the electronics industry. 

Apple | Spotify | YouTube | Google

Filter Articles By Category

View All Connector Articles


Select Contributor to view their article(s)

View All Passive Articles


Select Contributor to view their article(s)

View All Supply Chain Articles


Select Contributor to view their article(s)

Stay Updated

Subscribe to our newsletters, promotions, and product updates.

Material Costs

Search MarketEYE