Many consumers across the globe love electronic devices -the latest by the way- that are advanced in technology and require a lot of hours of technical work before they can actually be put up for sale.
Considering that in the consumer electronics segment, the number of users is expected to amount to 2,562.5m by 2023, companies whose business revolves around selling consumer electronic products are faced with the Titanic task of producing millions of electronic units every year, which is not easy.
Many of these companies simply lack the resources, expertise and logistics to be able to manufacture their own product, that’s why many resource to outsourcing. Outsourcing has proven to be a successful move for many companies in the consumer electronics segment, some of them being able to make billions in revenue every year.
Outsourcing also allows companies to focus in what they know how to do best, in many cases that is marketing, branding and customer service, something that for any company dealing directly with the end consumers is vital for surviving.
Do you know how many cellphones were made in China from May 2018 to May 2019? Take a guess!!
If you said a over one billion then you’re right.
A lot of that cellphones’ production was outsourced by companies outside of China. Now I’ll show you a list of 10 companies that make use of ODM (Original design manufacturers) to outsource electronics manufacturing so they can focus on their end consumer.
Although it is not well known by many people, it is one of the leading outsourcing manufacturing companies in electronics and technology globally. The company has over 150,000 employees across the globe and has spread its wings in more than 100 countries worldwide.
The company came into existence in 20th June 1935 with its headquarters in Tokyo, Japan and owned by Furukawa Group. It is involved in producing mobiles, PCs, laptops, and electronic components among others. Its annual sales revenue in 2018 was $36.1 billion.
Even though Fujitsu products are assembled in Japan, many of their electronic components such as motherboards, RAM chip sets and HDD,among others, are made in countries like Vietnam, Korea, Malaysia and China.
This company came into place when Shibaura Engineering Works and Tokyo Electric merged in 1939. Shibaura was known as one of the very first ODM of telegraph equipment and electrical machinery which made it a leader in industrial power globally. Tokyo Denki was majorly in electric lamps.
Toshiba later acquired OCZ Technology which gave it a boost in its expansion. Its innovation and development have made it improve continually. It had an annual sales revenue of $44.28 billion in 2018.
Many of Toshiba products, such as flash drives, T.Vs, keyboards and surveillance cameras are made in China.
This company using outsourcing manufacturing as part of their business model is located in South Korea and now has presence in over 80 countries. It was made out of the mergerof Rak-Hui (Lucky) which was involved in plastics and Goldstar which was making electronics.
The two merged to form LG which was known for producing soaps. It later dissolved and started dealing with electronics. It has over 120 operations globally with over 75,000 employees. It had an annual sales revenue of $54.4 billion in 2018.
LG products range from smart phones to washing machines and fridges, these products are made in Vietnam,China and India respectively.
The company was established by William Bill and David Packard. Since 2007 to 2014 it was the leading manufacturer in PC, however, it was overtaken by Lenovo. The company focuses on printers, computing devices, software services,among others.
Most of HP’s laptop components are manufactured in China,some of them are from Thailand, Malaysia and Philippines, the assemble process might either take place in USA or China, depending on which market the final product will be sold. Its annual sales revenue in 2018 was $58.5 billion.
Another of the companies outsourcing electronics manufacturing.
Before the company was re-branded, it was known as Matsushita Electric Industrial Co. Ltd. The company was established in 1918 in Japan and has been involved in various lines of products and services like making bulb attachments, projectors, batteries, cameras, air conditioners, and other electronic items and fittings.
It got involved in the TV sets business where it got a relatively large market. Later, it had a partnership with Tesla motors and acquired ITC Global which played a great role in making it have a great market share across the globe. Its annual sales revenue in 2018 was $69.03 billion.
Panasonic’s product portfolio is big, it includes products like Cameras, Bluetooth Wireless earphones, batteries, projectors, scanners, blood pressure monitors and more. Out 318 products made by Panasonic,71 are made in China, 46 in Malaysia, 13 in Thailand, 10 in Taiwan, 3 in Mexico, 3 in the USA, 2 in Czech Republic, 2 in Poland, 1 in the Philippines, 1 in Germany , 1 in Slovakia and 165 in Japan.
This happens to be one of the outsourcing companies that have a very strong global presence. This company has subsidiaries like Sony Storage Media and Devices Corporation, Sony Global Manufacturing and Operations Corporation, and Sony Corporation among others.
It has been doing business in multiple and diverse areas like photography, computing, videography, television, smart devices, home cinema, cables, accessories, smart devices, and audio. A move they made to become profitable was to outsource product design and manufacturing. Its annual sales revenue in 2018 was $76.8 billion.
Many of Sony’s cameras are made in Thailand and China. It was in 2017 when the new Sony a7rIII was noted to have been made in China,before that all mirror less system cameras were made in Thailand.
This computer company has its headquarters in Texas, California. This company has focused in the line of “Build-To-Order” models. This has helped Dell to focus its design, maintenance, and development around its consumer needs.
After Dell acquired Perot system, it changed from being a hardware manufacturing company only and added some IT services. The company has been advancing in its inventory network administration and other electronic trade.
In managing their inventory, they apply the Just-In-Time approach to ensure that they maintain a constant flow of products. Its annual sales revenue in 2018 was $78.7 billion.
Assembly of desktop computers for the North American market used to take place at Dell plants in Austin Texas and Lebanon, Tennessee , which have been closed in 2008 and early 2009, respectively.Most of the work that used to take place in Dell’s U.S. plants was transferred to contract manufacturers in Asia and Mexico, or some of Dell’s own factories overseas.
Perhaps this is one of the oldest companies in the electronic field, dating back to April 4, 1975, when it was founded by Bill Gates and his colleague Paul Allen. It was considered as the world’s largest maker of various software.
From the way how it has been doing timely updates on its software over the years, you can tell that the company is built on constant research and development. It started with Microsoft Windows and later MS office which proved to be very useful to consumers, making it have the greatest market share among the electronics company.
Its annual sales revenue in 2018 was $110.36 billion. Surface laptops are made in China.
Samsung was founded in 1938 in South Korea and has turned out to be one of the leading in selling phones and smartphones. In terms of phone segment, its market is generally good. Since it acquired Hanguk Jeonja Tongsana telecommunications, there was a boost in its growth.
It has also turned out to be a major microchip producer and ceased from outsourcing from other companies. Later, it released the first Liquid Crystal Display screen which changed the television world. It continued releasing even sleeker televisions which became the best of many. Its annual sales revenue in 2018 was $219.34 billion.
50% of Samsung Mobile Phones are made in Vietnam.
At present, Samsung has six mobile phone manufacturing facilities in six countries , Vietnam, China, India, Brazil, Indonesia, and Korea. The two plants in Vietnam have a combined annual production capacity of 270 million units.
The factories in China have a maximum capacity of 150 million phones. However, Samsung is looking to cut their production by 40 million because of high labor costs in China.
Having been ranked as one of the most valuable companies in the world, Apple has been known to deliver quality electronics to its consumers. It has taken the market with products like iPhone, iPad, and Mac. As compared to most premium brands in smartphones, it had some of the most innovative features.
It was formed in 1976 on April 1 by the now famous Steve Jobs, Ronald Wayne, and Steve Wozniak. Their first product was from Wozniak, who designed Apple 1 which was sold for $2,867. Its annual sales revenue in 2018 was $265.6 Billion.
The majority of Apple’s iPhones are assembled in Shenzhen, China, assemble from different parts that are made in China and other handful of countries.
Conclusion. Companies Outsourcing Manufacturing
All the companies mentioned in this list are part of a very competitive market,the consumer electronics market, a segment with already strongly established brands and new ones popping up every year in hopes of getting some of the market share. Overall all companies in the consumer electronics segment are fighting to stay relevant which is why they resource to outsourcing manufacturing.
By doing so,these companies can focus on doing the so needed marketing activities to come up with new and innovative designs and software ideas that will keep them relevant and asking people for more.
As you were able to see, China still remains as one of the main destinations for outsourcing, and this is no longer just because of low cost of labor, but because China has managed to build one of the best logistic ecosystems for electronic manufacturing.
In 2017 China exported 40% of the world’s computers, and as of data from 2017, China makes 80% of the world’s air conditioners.
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We engineer our products in Taiwan and are very well tapped into the China/Taiwan Component Eco-system, so key to remain competitive. We involve a few trusted factories, right from the start of the design. This way we make sure everybody is aligned, and by avoiding surprises we avoid delays, assuring the fastest possible Time To Market (hence our name Titoma).
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