Samsung Electronics’ Intentions
South Korean electronics giant, Samsung Electronics Co Ltd intends to cut production of smartphones in China because of the heavy competition against local companies. Samsung’s smartphone market share in the country is currently less than 1%.
Reporting from Reuters on Tuesday (06/11/2019), the production cut of the Samsung factory located in the southern part of Huizhou City was only 6 months after the company said that it would close the handset factory in the northeast part of Tianjin in order to increase efficiency.
Samsung, which is currently named as one of the world’s largest smartphone manufacturers, has experienced a decrease in market share in China. According to Strategy Analytics data, in 2013 Samsung’s smartphone market share reached around 20%.
In the following years, anti-South Korean sentiments emerged in China following diplomatic disputes between the two countries and coupled with a shift to local products such as Huawei.
The Counterpoint Research report shows that although market share continued to decrease, throughout the first 3 months of 2019 Samsung’s smartphone sales volume in China rose 40% compared to the previous quarter. This is driven by strong marketing efforts in the premium segment and cheaper mass-market classes.
Also Read: Samsung Delays Update on Galaxy S10 Software
Samsung Electronics: Their Given Statement
A statement released by Samsung in response to news of a cut in production volume released by financial magazine Caixin, said the company had offered voluntary resignation of several employees working at the Huizhou factory.
However, Samsung declined to mention in detail the information about the capacity of the plant, the number of employees, and production cuts when contacted by Reuters.
A Samsung spokesman in China said there would be some adjustments to production volume and the amount of labor caused by market conditions. Nevertheless, he also refused to provide further information.