Samsung is set to move to China in a bid to compete with rivals making low-cost smartphones up to a fifth of its production.
You may remember that not so long ago, Samsung shut down its only smartphone plant based in China, which makes it sound like a snap decision. Samsung is set to partner with Chinese contractor Wingtech, according to Reuters, to help them build the popular A smartphone series.
The report also suggests that in 2020, Samsung aims to ship around 60 million Chinese-made smartphones, a significant portion of the estimated 300 million over the same 12-month period.
For other brands like Oppo, HTC, and Huawei, Wingtech has a history of producing smartphones. This is one of the reasons why Samsung is working with the company because they have the necessary experience in producing large-scale devices.
While this would be great for the level of production, it is uncertain whether this move would be a good move considering that Samsung has had some issues with device reliability — most recently with the Galaxy Fold. Outsourcing smartphone production to China could result in Samsung introducing the greater potential for defects in manufacturing and device issues.
Nevertheless, lowering costs remains a top priority, as while Samsung remains the world’s top smartphone manufacturer, at the lower end of the pricing spectrum rivalry has become fiercer. Samsung’s thin margins mean that a massive financial boost would be given by reducing the cost of production.
Most of the new A-series devices produced at this new Wingtech plant would be targeted at the markets in South America and South East Asia. Nonetheless, it is unclear whether the South Korean firm will again approach China, as the company only maintains one percent of the region’s market share.