The global supply chain for smartphones and electronics is undergoing a marked transformation. Shifting geopolitics, rising costs, evolving consumer demand and accelerated diversification are reshaping manufacturing, sourcing and distribution.
Below is a detailed look at where things stand and what the implications are moving forward.
From China to Multi-Hub Manufacturing
Historically, manufacturing of smartphones and major electronic devices was heavily concentrated in China. That is no longer the full picture. In the second quarter of 2025, India emerged as the largest exporter of smartphones to the United States, taking a 44% share, up from 13% a year earlier, while China’s share fell to 25%.
India’s rise has been supported by its manufacturing ecosystem (over 300 mobile‐manufacturing units) and government incentives. Similarly, companies such as Foxconn and its partners are shifting assembly of premium models (Apple for example) to India and other Asia-Pacific locations.
This shift reflects a clear strategy: reduce dependence on a single country, spread risk across locations, and tap new markets. That goal, however, is still a distant one. Critically, China remains a central source for components, expertise and deep manufacturing infrastructure.
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For manufacturers and suppliers changing locations means more complexity managing multiple sites, varied regulatory regimes, and longer, more fragmented logistics.
Component Bottlenecks, Costs and Risks
Even as manufacturing shifts, supply chain bottlenecks remain. The electronics industry in early 2025 reported strong demand after nearly a year's tepid growth, with the IPC Shipment Index peaking, signalling that orders and fulfilment are both picking up.
However, raw materials, key components and their lead-times continue to pose challenges. High-volume components like display modules, camera modules and semiconductors are subject to supply constraints, price inflation and longer procurement cycles.
For mobile manufacturers the risk is that any disruption in semiconductor supply, logistics or material sourcing cascades into delays or higher costs. Moreover, there is a trend toward consolidation among component suppliers - meaning fewer sources for critical parts, potentially increasing vulnerability.
From a cost perspective: labour, logistics, raw-material costs and regulatory burdens - particularly in new manufacturing hubs - are rising, which squeezes margins for device makers and distributors alike.
Distribution and Inventory
On the distribution side, smartphone and electronics retail is facing a mixed picture. Demand growth is modest in many mature markets, even as premium device launches push innovation. Meanwhile, supply-chain shifts (manufacturing to new hubs, longer transport routes) are adding complexity.
Nevertheless, inventory models are under strain. Manufacturers and retailers can no longer rely purely on ultra-lean “just-in-time” approaches without risk.
The fragmented manufacturing base means inventory buffers, alternate sourcing strategies and logistic agility matter more. For retail distribution, factors such as component shortages, shipment delays and trade-policy uncertainty (tariffs, export controls) are becoming meaningful risk drivers.
Strategic Implications
What does this mean for players across the mobile ecosystem? Several strategic take-aways emerge.
An end-to-end diversified manufacturing footprint is essential. That means ready industrial capacity not just for assembly, but also for the manufacturing of components and sub-assemblies. India's rise as a manufacturing hub - that is still largely dependent on components from China and East Asia - is illustrative.
Understanding where components come from, how long their lead times are and what geopolitical risks exist, is now a baseline requirement. With manufacturing further from final markets in some cases, lead times are longer and the supply chain more complex. Buffering, alternative sourcing and logistic flexibility are increasingly important.
Manufacturing in new geographies may reduce geopolitical risk, but may increase logistics cost, lead-time risk or infrastructure investment. Component cost inflation will also challenge device makers and retailers.
Finally, device makers will also need to consider ESG goals, traceability, regulatory compliance and recycling or disposal. Today, the supply chain for mobile phones is more than just about manufacturing, assembly and distribution.
Outlook and Risks
The outlook for the global mobile-device supply chain in the next two to three years is cautiously optimistic - growth opportunities exist, but so do structural risks.
On the upside, manufacturing diversification is accelerating, demand for new form-factors and connectivity (5G/6G, foldables, IoT integration) remains solid, and many manufacturing and logistics firms have learned the lessons of pandemic disruption.
On the downside there are several potential flashpoints like trade tensions, export controls, supply chain disruption, raw-material shortages and demand softening.
Given these risks, device makers and retailers will likely continue to hedge their bets by keeping options open for component supply and manufacturing locations while maintaining some inventory buffer and building logistics flexibility.
Supply Chain a Strategic Battleground
For mobile-phone manufacturers and electronics retailers, the supply chain landscape is no longer a backdrop - it is a strategic battleground. The shift away from a China-centric model to a multi-hub world is well under way. But managing the resulting complexity, cost and risk requires far more than incremental tweaks to the supply chain.
In this era, success will favour those who combine manufacturing agility, supply chain visibility, diversified sourcing and resilient logistics. The question is not simply where a phone is assembled, but how every part of the chain is orchestrated - from raw-material to the consumer's hand.
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