See More on Facebook

Economics

Will Samsung stop manufacturing Galaxy phones for China?

Samsung Electronics might be planning to outsource production for some of its mid- and low-end Galaxy-series phones destined for the Chinese market.


Written by

Updated: +00

According to some news reports, Samsung’s mobile business executives led by Executive Vice President Roh Tae-moon visited China’s Wintech, Xiaomi’s original design manufacturing branch, to discuss the possibility of manufacturing Samsung phones at Wintech’s factory.

Samsung’s public relations officials declined to confirm the report, saying they couldn’t check the executive’s schedule, but said, “The company has been considering introducing the ODM system not only in China but also in other countries when needed.”

If the talks between Samsung and Wintech go smoothly, Chinese consumers could see Galaxy smartphones featuring the Samsung logo but manufactured at Wintech’s facilities in China.

The rumors about Samsung phones going for ODM began circulating around July as the Korean tech titan was struggling to recover its share in the Chinese smartphone market.

The latest statistics by Strategy Analytics showed that Samsung’s share in the market dropped from 1.3 per cent in the first quarter to 0.8 per cent in the April-June period.

“Samsung could be considering the ODM order system as a remedy for its lacklustre performance in the Chinese market,” said an industry insider. “The ODM system could help at least cut manufacturing costs while the smartphone business in China undergoes restructuring.”

Samsung has been overhauling its smartphone business in China since last year, carrying out organizational reshuffles and taking other measures to improve efficiency in distribution and sales.

“There were internal discussions at casual levels among senior officials in charge of the China business several years ago when the Apple-Foxconn partnership seemed to be working well in terms of the cost-to-quality ratio,” a Samsung official said.

However, questions remain as to whether the ODM strategy will work now, considering that the current market conditions in China affecting Samsung stem not just from the cost problem but more fundamental ones, including the distribution network problem, the official explained.

“A very few models could be (produced via) ODM orders, but Samsung is more likely to maintain its manufacturing-driven position in the market,” he said.

To restore the company’s market leadership in China, Samsung’s mobile business chief Koh Dong-jin is said to visit the country every month to spearhead local business.

“Samsung is trying to regain Chinese consumers’ trust by listening to their needs and reflecting (their wishes in) our products’ design, sales and marketing plans,” Koh said in a speech at the launching ceremony for the Galaxy Note 9 in China in August.



Enjoyed this story? Share it.


The Korea Herald
About the Author: The Korea Herald is the nation’s largest English-language daily and the country’s sole member of the Asia News Network.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Economics

S. Korea grapples with gender discrimination in workplace

Despite it’s high economic developments, critics say that South Korea has to improve workplace equality. South Korea has seen its female employment index improve steadily over the past 10 years, but continues to struggle with gender equality when it comes to parental leave and consequent career breaks, data showed Monday. Unlike in most developed economies which tend to see the employment rate of women in their 40s peak and start declining in the 50s, Korea has seen women in their late 30s and early 40s — the prime age for childbirth and childcare — being pushed out of the labor market. All seven of the so-called 30-50 club count


By The Korea Herald
October 22, 2019

Economics

More changes friendly to foreign investors on way in China

China is courting more FDI as their cash reserves run lower. China will roll out more measures friendly to foreign investors, including further removing business restrictions and leveling the playing field for foreign businesses, to foster a more enabling business environment and attract overseas investment. The decision was made on Wednesday at a State Council executive meeting chaired by Premier Li Keqiang. Meeting participants decided to open up more areas. Restrictive measures outside the national and FTZ negative lists on foreign investors’ market access will be consolidated. Restrictions will be lifted on the business scope for those foreign-invested banks, securities companies and fund management firms that are already operating in China. Policies on foreign investment in the automobile industry will be refined, including giving equal treatment in market access to domestic and foreig


By China Daily
October 18, 2019

Economics

Malaysia’s PM Mahathir says rail line RTS linking Johor Baru to Singapore to proceed

The rail line has been on again and off again. Prime Minister Mahathir Mohamad on Thursday (Oct 17) said Malaysia will proceed with the 4km Johor Baru to Singapore rail line. His comments about the Rapid Transit System (RTS) rail link followed that of Malaysian Transport Minister Anthony Loke on Tuesday that details of the project will be decided by the Malaysian Cabinet within two weeks. Tun Dr Mahathir said when asked by reporters on Thursday: “We will proceed with the RTS but we will take some time.” Asked if this meant the Malaysian government had resolved 


By The Straits Times
October 18, 2019

Economics

BOK slashes key rate to record-low 1.25%

The government hopes to stimulate a stagnating economy. South Korea’s central bank on Wednesday cut the country’s key interest rate to 1.25 percent, reflecting the sluggish economic growth, low inflation and declining exports. Its second rate cut in three months — to the lowest ever level — is in line with the global trend toward monetary easing. “We have cut the base rate considering the lower-than-expected growth outlook and low inflation,” said Bank of Korea Gov. Lee Ju-yeol in a press conference.The BOK’s rate-setting Monetary Policy Board decided to lower the base rate by 25 basis points from 1.5 percent that it had set three months ago. The move paralleled the US Fed Reserve’s decision last month to lower its key interest rate to the 1.75-2 percent range, down 25 basis points from the previous 2-2.25 percent range. The BOK board cited contractions in trade, sl


By The Korea Herald
October 17, 2019

Economics

Hong Kong leader Carrie Lam unveils measures to ease housing crunch

Lam was forced to deliver speech via video after protests. Embattled Hong Kong leader Carrie Lam announced measures aimed at easing a housing shortage on Wednesday (Oct 16) as she battles to restore confidence in her administration and address widespread discontent after four months of mostly violent anti-government protests. Mrs Lam was forced to deliver her speech via video after her annual policy address in the Legislative Council was aborted when some lawmakers repeatedly jeered and shouted at her as she began speaking. After aborting her speech in the chamber tw


By The Straits Times
October 17, 2019

Economics

Thai labourers face uncertainty over cost of production

The trade war has not left Thailand unaffected. The slowdown in global economy has dampened growth of the support industries in Thailand in its role as a part-producer for foreign investors, with all finished items shipped out to target countries or the parent companies. When investing companies add value to their products and sold at higher prices, Thai producers receive less profits, resulting in low wages for labourers. Production of industrial parts could be easily relocated to other countires, said Chalee Loysong, president of the Confederation of Electronic, Electrical Appliances, Auto and Metal Workers (TEAM). A clear sign of the move emerged when companies started to reduce costs through cutting down on the numbers of both full-time workers and those engaged in outsourced work, he said, adding that the latter are especially prompt to being discarded, given the absen


By The Nation (Thailand)
October 16, 2019