On October 28th, foreign media reported that Samsung had decided to outsource 20 percent of its 300million smartphones, or 60m, to Chinese companies each year, instead of being produced by subsidiaries around the world, meaning that South Korean suppliers would supply significantly.
In October, Samsung announced the closure of China’s last mobile phone factory, a complete exit from the country’s handset industry, and a full shift in future production of handset products to India and Vietnam.
To compete with cheap Chinese products, Samsung is partnering with Chinese companies in the form of ODM(original design manufacturer). Pricing is then set by Chinese companies to design components and assembly, and then labeled “Samsung” trademarks sold around the world.
The News Agency says Samsung is looking to Chinese manufacturers to capture the world market with more low-cost smartphones.
ANOTHER SOUTH KOREAN COMPANY, LG ELECTRONICS, WHICH PRODUCED ODM EARLIER THAN SAMSUNG, IS IN MUCH THE SAME POSITION.
It is reported that next year to take this approach to the number of smartphones may be as high as 30%, so South Korea’s related parts companies may be in a depression.