Chinese Companies to Produce 67 Million Samsung Phones This Year

Samsung’s dependency on outsourced production for its budget smartphone segment appears to be on the rise. The South Korean technology leader is expected to manufacture 67 million smartphones in 2024 through partnerships with Chinese original design manufacturers (ODMs) and joint device manufacturers (JDMs), according to The Elec.

This marks a notable increase from the 44 million units produced in 2023 and represents a significant 25% of Samsung’s total smartphone production goal of 270 million units for the year.

The report also highlights Vietnam’s integral role in Samsung’s outsourcing strategy, with projections indicating that approximately 28 million units will be manufactured in Vietnamese facilities.

Samsung’s substantial shift towards outsourcing aims to reduce production costs, enabling the company to offer more competitively priced models within its budget phone lines.

Since initiating outsourced production for affordable phones in 2019, Samsung has gained a competitive edge through reduced production and R&D expenses. However, this strategy also sparks concerns regarding potential quality compromises associated with outsourcing.

To boost their profit margins, ODM partners may compromise on the quality of materials or components, which could affect the overall user experience. Samsung Galaxy A03s, thought to be produced through outsourcing, serves as an example.

Although it has received praise for its extended battery life and usability enhancements, the phone has been criticized for its substandard build quality and slow performance.

Despite potential shortcomings, Samsung’s strategy appears to be effective with consumers. The company stood out as the only Android manufacturer to have phones featured among the top 10 best-sellers for both 2022 and 2023.

Thus, the cost-saving measures enabled by outsourcing are producing affordable Android devices that are successfully capturing market share.

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