Samsung Ceased Mobile Phone Production In China
SAMSUNG – The massive tech conglomerate has ended its mobile phone production in China due to intensified competition from domestic rivals within the biggest smartphone market.
China is no doubt one of the biggest markets when it comes to smartphones. As the saying, God created the world, and the rest was made in China.
The world’s biggest iPhone factory could also be seen in China. Dubbed as iPhone City, Foxconn’s Zhengzhou facility produces half of the world’s iPhones.
Aside from Apple, Samsung also faces domestic giants such as Huawei, Oppo, Vivio, Xiaomi, and OnePlus. As the competition steeped, Samsung had to cut-off their last phone factory in Huzhou.
Based on a report from Reuters, Samsung ceased its production due to increasing labor costs and the economic slow down faced by the country.
Along with Samsung, Sony had also shut-down its smartphone manufacturing plants in China. Instead, they would exclusively produce smartphones in Thailand.
Samsung’s share of the Chinese market was gutted down to a mere 1% in the first quarter from 15% in mid-2013. The rise of fast-growing domestic brands such as Xiaomi and Huawei were major factors to this decrease.
According to Park Sung-soon, a Cape Investment & Securities analyst, the Chinese buy low-end phones from local brands. He then added that when it comes to high-end phones, they buy from either Huwawei or Apple.
The analyst also stated that the chances of Samsung reviving its shares are slim to none. In a statement, Samsung said that they would instead re-allocate their production equipment to other global manufacturing sites.
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