Samsung ends mobile phone production in China, impacting job

Samsung Electronics said on Wednesday that it has ended mobile phone production in China – impacting job at its manufacturing centers.
Samsung declined to specify the plant’s capacity and number of staff. The company has started expanding smartphone production in lower-cost countries, such as India and Vietnam, in recent years.

China is the world’s biggest smartphone market. Samsung’s smartphone shipment in China was flat in Q2 2019. Huawei, Oppo, Vivo, Xiaomi and Apple are the top five smartphone suppliers in China during the second quarter of 2019.

The shutdown of Samsung’s last China phone factory comes months after it cut production at the plant in the southern city of Huizhou in June and suspended another factory late last year, underscoring grueling competition in the country, Reuters reported.
Counterpoint Research Analyst Flora Tang said: “Samsung’s market strategy in China has shifted in 2019 to a more cost-effective route. For example, the launch of the low-to-mid-end Galaxy A series helped Samsung’s sales growth during the promotion period of the summer vacation.”

The South Korean firm’s share of the Chinese market shrunk to 1 percent in the first quarter from around 15 percent in mid-2013, as it lost out to fast-growing homegrown brands such as Huawei Technologies and Xiaomi.

Smartphone shipments in China fell 9 percent year-on-year and grew 10 percent quarter on quarter during Q2 2019.

Samsung, the world’s top smartphone maker, said it made a difficult decision in a bid to boost efficiency.

“The production equipment will be re-allocated to other manufacturing sites, depending on global production strategy based on market needs,” it said in a statement.