Time and again we have seen that Xiaomi struggles to keep up with its new smartphone’s supply. Quite often you have to wait for weeks to get one unit in its flash sale. This was also evident in the case of the Xiaomi Mi 9 in China, especially in the first few weeks of its launch. On the other hand, there are smartphone companies like Vivo keeping a steady stock of its flagship like the Vivo iQOO.

Ever wondered why there’s such a big difference in supply between the two? A new report throws additional light into their manufacturing strategies.

Most smartphone companies, including big players like Xiaomi, Huawei, and Samsung rely on ODMs (Original Design Manufacturers) for designing and manufacturing their smartphones. ODMs take care of the overall design and specifications to manufacture products that are tailored to customer requirements. This way, the companies don’t have to worry about factories or manufacturing, thereby saving cost as well as shortening the product development cycle.

According to new data, Xiaomi relies a lot on ODMs. In fact, Xiaomi’s reliance on outsourcing is said to be one of the highest among the top smartphone players in the market. Data reveals that Xiaomi outsources nearly 75% of its design and manufacturing to ODMs like Huaqin, Wingtech, and Longcheer. These three companies are the top three ODMs in the market right now, so they have the experience and expertise to churn out smartphones quickly. However, we have seen outsourcing still isn’t a guaranteed way to meet customer demand, which in its case, is quite high. That’s probably why Xiaomi struggles to ramp up production quickly in the initial high-demand period.

On the other hand, let’s take a look at a company like Vivo. This Chinese smartphone maker is doing exceptionally well in the past few months. Vivo and Huawei were the only two companies in the top 5 list that increased their Q1 2019 shipments YoY. While shipments from other companies including Xiaomi contracted in the same period. The company’s strict control over its manufacturing likely helped in stabilizing its supply.

• RELATED: Xiaomi’s Supply Chain Is Still Far Behind Apple, Samsung & Huawei: Analyst

According to the report, Vivo is the only company that is completely self-reliant for designing and manufacturing its smartphones. So, when iQOO had an initial supply shortage, the company could quickly work with its factories to fix the supply gap. While the initial investment in setting up its own factories could have been quite high, the move seems to be paying off.

Since Vivo takes care of its own design and manufacturing, it has managed to establish strong direct relationships with essential component supplies. This ensures that the company has a competitive edge even when high-quality component supply could be tight. The company is already pioneering a lot of technological innovations. Next-gen features such as in-display sensors, a port-less and hole-less smartphone, and even the world’s first all screen smartphone, Vivo Nex, came from this Chinese tech giant.

• RELATED: Xiaomi’s Lin Bin says inexperience has caused Mi 9 supply issues

Meanwhile, companies like Nokia and OPPO have reportedly increased their reliance on ODMs to meet their manufacturing needs. Interestingly, Lenovo outsources nearly 85% of its manufacturing, even more than Xiaomi. Even LG has given 50% of its manufacturing to ODMs.

(Via)

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Xiaomi makes some of the best value for money smartphones that we have seen in the market lately, but the company has one major drawback, inadequate supply of its products. Many of the new smartphone launches from the company are hard to get even in China, which means most of the desired consumers are left disappointed. But looks like the company is taking appropriate measures to change this.

In an internal letter sent by Xiaomi’s CEO Lei Jun, he has stated that from now onwards, he will personally be responsible for the phone supply chain of Xiaomi. The existing supply chain head, Zhou Guangping will now take care of the technology research department of the company. Now that the CEO himself is going to take care of the supply of Xiaomi smartphones, it looks like this issue has been given due attention. And this change should positively affect the company. If the supply improves, the sales will improve and everyone is happy end of the day. It was an urgent matter and we hope it will solved real soon.

So, what do you think? If Lei Jun, the CEO himself is in charge of the supply of the company’s smartphones, will we be seeing a significant improvement in the overall availability of Xiaomi products?

In case you are wondering, yesterday, we reported that Xiaomi is manufacturing around 700,000 units of the Mi 5 per month, lower than Huawei Mate 8’s 900,000 and OPPO R9’s 2 million per month figure.

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