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Samsung plans to significantly boost its smartphone production by outsourcing to Chinese manufacturers, increasing output from 44 million to 67 million units.
Samsung's Outsourcing Strategy Targets Cost Efficiency
According to The Elec, Samsung intends to augment smartphone production by joint device manufacturers (JDMs) in China from 44 million units in 2018 to 67 million in 2019. Consequently, 25% of Samsung's projected 2024 smartphone output of 270 million units will be derived from outsourced devices.
In addition to an increased reliance on Chinese companies for production outsourcing, the news source reports that factories in Vietnam will receive 28 million units or approximately 10%.
In 2019, the firm allegedly tried to save expenses and raise prices by outsourcing the production of a few devices. However, Samsung usually reserves this production approach for its low-cost phones rather than its high-end models.
Monitoring Quality in Outsourced Production
While Samsung's adoption of outsourcing to offer more affordable budget phones, as suggested by Android Authority, may seem like a positive move, there are potential risks involved.
The possibility of original device manufacturers (ODM) partners taking shortcuts to maximize profits raises concerns about the quality of Samsung's low-cost smartphones. This aspect of the outsourcing strategy needs to be carefully monitored to ensure it doesn't compromise the company's reputation for quality.
Positive Market Feedback on Outsourced Models
The Samsung Galaxy A03s, reportedly an outsourced phone, has been well-received in the market. As per the tech news website, it boasts a decent battery life and several noticeable enhancements to the quality of life.
This positive feedback on an outsourced device indicates that Samsung's outsourcing strategy, when executed effectively, can lead to successful product launches and customer satisfaction.
19 million JDM cell phones were produced by Chinese businesses between last January and this month. Of those, 10 to 11 million were made by Wingtech, 5 million by Hwaqin, and 3 million by Longcheer.
