As Sales Plummet Samsung closes down its last manufacturing plant in China

Only a year after Samsung shut down its smartphone assembly facility in Tianjin, China, the company is now closing down its last manufacturing plant in Huizhou. 

This leaves Samsung now with no smartphone plants in operation there and practically abandoning the Chinese market that is 400 million strong, amidst its competition with Chinese brands like Huawei, Vivo, Oppo, and Xiaomi.

Just six years ago, the top spot in the Chinese smartphone market was held by Samsung with a 19% volume share which is definitely all in the past as the company had less than a 1%  in 2018.

Suggestions by analysts say it may be due to Samsung’s not appreciating the difference in the trends between Chinese and Western markets where there is a sharp polarization between premium and budget mobile handsets in China. Where Samsung only filled out its lineup with affordable devices with a few premium features, its Chinese competitors went all out to produce either premium ultra-expensive status symbols or killer flagship devices.

Samsung’s standing in the smartphone marketplace in China may be mirroring its performance in India last year where it slipped from its previous standing of being number one to number two allowing China’s Xiaomi to take the lead.

Samsung is manufacturing a major portion of its budget and mid-range handset devices in India and selling them to the local and overseas markets, while it manufactures most of its premium devices in Vietnam The company currently employs 200,000 workers in Hanoi producing about 150 million Galaxy devices which are planned for East Asian, American and and European markets.

In spite of its closing down all its plants in China and its struggles in the world’s two largest smartphone markets, surprisingly, Samsung, with its headquarters in Korea, continues to lead as the largest smartphone manufacturer worldwide with a sales volume of 20.8%.  But that too is down by slightly more than half from last year by 21.7% and their overall shipments from plants in Brazil, China, India, Indonesia, Korea, and Vietnam fell by 8% in volume as well.

Samsung has benefited from Huawei’s political turmoil globally and also from Apple’s awkward pricing of its iPhone X and XS series. But Apple seems to be resolving that issue with its iPhone 11 series which is more compelling and cheaper than the XR while Huawei is coming out better than expected with its Mate 30 despite a tarnished reputation.

For now, Samsung’s flagship prospects will be depending on the forthcoming Galaxy S11 series which is expected to be released next February 2020 and hopefully with the incentive for users to upgrade with the rise of 5G.

Reply