Samsung closes last smartphone factory in China as sales struggle continues

Samsung closes last smartphone factory in China as sales struggle continues
Samsung is currently the world’s largest smartphone manufacturer yet, regardless of how hard it tries, it simply cannot crack the Chinese market. Around ten months ago the Seoul-based company was forced to close a factory in China due to weak sales locally and earlier this summer it scaled back production at its remaining facility. Now, things seem to have taken a turn for the worse.

Samsung's ending all smartphone production in China


After a report published yesterday claimed the company was in the process of closing down its last smartphone factory in China, Samsung has today confirmed to Reuters that it halted all production “at the end of September.” The “difficult decision” was made in a bid to boost efficiency in China as its local smartphone business failed to show signs of growth.

Samsung confirmed all “production equipment will be re-allocated to other global manufacturing sites, depending on our production strategy based on market needs.” It didn’t elaborate any further but this could mean smartphone output in both India and Vietnam will soon see a slight boost.

As for the conglomerate’s plans in China moving forward, it seems Samsung will continue to import premium devices such as the Galaxy S10 and Galaxy Note 10+ while also relying more heavily on its ODM business, which sees other companies manufacture Samsung-badged devices like the Galaxy A10s rather than the South Korean giant itself.

For reference, earlier reports suggest that out of the 300 million smartphones Samsung’s expected to ship this year, 24-to-40 million units could be manufactured by an ODM. In an ideal world, most of these units would be sold in China but the state of Samsung’s local business means this simply isn’t the case.

Samsung still can't compete with Xiaomi, Huawei, or Oppo


At its peak in 2013, Samsung held a very respectable 20% of the Chinese smartphone market. But as low-cost and homegrown rivals such as Xiaomi, Huawei, and Oppo began to emerge things quickly turned sour. 

By 2016 Samsung held just 4.9% of the local market and things got even worse the following year when this number dropped to 2.1%. Throughout most of 2018, Samsung struggled to maintain a 1% market share but it did receive a slight boost in early 2019. Following a successful Galaxy S10 launch, Samsung’s share jumped back to 1.1% but during the following three months it decreased to just 0.7% as sales slumped to 700,000 units.

The most recent developments mean Samsung is no longer the sixth-largest smartphone manufacturer in China behind Apple. Local brand Meizu now occupies this position and Samsung falls under the ‘Others’ category, although it presumably sits in seventh-place overall.

Results for Q3 2019 are likely crucial for Samsung


Market share and sales figures for the July-September quarter haven’t yet been published but the results could be crucial to Samsung. During the period, the company released the Galaxy Note 10, Galaxy Note 10+, and Galaxy Note 10+ 5G which have reportedly been doing quite well. In fact, sales are said to have “skyrocketed” in comparison to those of the Galaxy Note 9 in China.

Samsung also continued to push its Galaxy A series which now includes two versions of the Galaxy A40s – a rebranded Galaxy M30 – in addition to the Galaxy A60, Galaxy A70, and Galaxy A80. The recently announced Galaxy A90 5G will most likely be launched in China at some point in the near future too, although Samsung’s exact plans are yet to be confirmed.

Ultimately, only time will tell if Samsung can find a way to regain its share in the Chinese market. But this year it seems to have tried everything and, if Q3 2019 sales disappoint, there's no denying the future for the brand is certainly looking bleak in China.

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24 Comments

1. gadgetpower

Posts: 283; Member since: Aug 23, 2019

This is really sad. One thing that Samsung should do is lower their prices. They need To stop competing against apple but they need to go against other android OEMs who are offering same or better specs at lower price.

2. mackan84

Posts: 560; Member since: Feb 13, 2014

Huawei flagships ain’t much lower in price.

9. AbhiD

Posts: 850; Member since: Apr 06, 2012

Huawei flagships ain't any $ lower in price. It's just that as Huawei is under pressure worldwide, "patriotic" chinese people are busy buying smartphone from their own company rather than a foreign one. Not to mention the historical tensions between S Korea and China.

3. DBozz

Posts: 70; Member since: Sep 19, 2019

Correction! The time OEMs competing with apple are gone days. Now apple is the one who's competing with android and doing catching up game. See that triple camera in iPhone 11? Apple not necessarily have to do that. But still they did! That night mode bro? I don't even have to say that... apple is running behind android coz the mobile tech has almost reached its saturation point and mobile industries only can now play with little catching up games interms of features

4. mackan84

Posts: 560; Member since: Feb 13, 2014

Those features aren’t “catching up”. Those are tried gimmicks that actually mattered to consumers and Apple copied them because they mattered. Apple has always done that, took something that was tried and deemed useful. Biometric passcode, high pixel density in a display, 64-bit architecture, oled, multiple cameras, premium exterior, night mode and so on. What Apple doesn’t copy is awful gimmicks or features that are failures in android like projectors, laser keyboards and so on. The thing that differentiate Apple is that their first go at something is usually better then the first try from anyone else.

6. MsPooks

Posts: 174; Member since: Jul 08, 2019

When you're always "taking something" from others, you're always catching up, by definition. You just made DBozz's argument.

21. mackan84

Posts: 560; Member since: Feb 13, 2014

Yep and also my argument and I wasn’t offended really. My point was to kill all arguments about copying and catching up. Everyone does it. They took something and made it better then the competition. Isn’t that what they all are trying to do? Night mode has been in apps long before it was implemented into the smartphone for example. The thing is apples screen is compared to both Samsung and Asus. Best OLED vs 120hz. The camera is compared to both Huawei and Google pixel. Best diversity vs best stillshots. The design is compared to Samsung and Huawei. Best front vs best back. It’s hard to please anyone that don’t want a iPhone :)

16. DBozz

Posts: 70; Member since: Sep 19, 2019

Ha ha... i didnt defend android by any means... if i wanted i wud hav used the word "copy" than using "catchingup". I wonder how u still got offended :D I feel wat i said was currently going on for the last two iterations of apple iPhones... even android is catching up with gestures of iOS and few other things. But compared to apple, android is way too less things they take frm apple. Even apple has some useless gimmicks like 3D touch that can easily be mimicked with long touch. Thats an utter waste of engineering on displays from apple or may be they havent used it effectively and removed it them selves saying to reduce the cost of their mobile.

23. mackan84

Posts: 560; Member since: Feb 13, 2014

I didn’t get offended but everyone is copying everyone in smartphones but from that their copying whatever other device with that feature/gimmick call it what you want. Apples 64-bit architecture from computers, Samsung’s OLED from Sony’s tv, 120hz is always nice when playing pc, some cameras have had multiple lenses up to 16... Just because it comes to a smartphone doesn’t mean it’s the first. They all just try to be best at that gimmick/feature. And yes Apple takes a good look what all these android-manufacturers do to select what seems useful. And each of these android-manufacturers do the same to everyone else. Remember Apple is one manufacturer, Samsung is one, Huawei is one, Asus is one, Sony is one, google, OnePlus, Xiaomi and so on. If apple tries to tackle every individual manufacturer and each standout feature in one iPhone it would be a waste of engineering and r&d.

18. Rampage_Taco

Posts: 1085; Member since: Jan 17, 2017

Oh, I forgot, it's only a gimmick unless Apple does it....

22. mackan84

Posts: 560; Member since: Feb 13, 2014

Its still gimmicks to try to justify our flagship-prices. Night mode on iPhone 11 is just software and could of easily been released for the earlier devices.

5. darkkjedii

Posts: 31328; Member since: Feb 05, 2011

China just isn’t gonna be a playground for Samsung. Cheaper phones are the big thing there.

7. mrochester

Posts: 1021; Member since: Aug 17, 2014

This is what happens when you run a commodity OS that means people only buy your devices on hardware and price. Samsung desperately needs its own OS and ecosystem like Apple has with iOS.

10. AbhiD

Posts: 850; Member since: Apr 06, 2012

They tried. Remember Tizen? And it failed massively. Tizen was written so poorly that Israeli security firm joked as it looked like some undergraduate pursuing an IT degree wrote it. Similarly Microsoft tried, they failed. BlackBerry failed. Nokia failed. Developing own Operating System is no joke. It's not as easy as throwing own skin on top of the OS. And no, Samsung doesn't need it's own OS to survive. It just needs to start being at the forefront of tech like it used to be even 2-3 years ago but has kind of lost touch lately. I just hope S11 is radical enough at camera front, gets bigger battery and ditches that inferior Exynos once and for all.

14. Arthurhkt

Posts: 726; Member since: Apr 19, 2012

Whelp, as mentioned above, Samsung do have their own OS, the Tizen, which fail miserably in both security wise and smartphone market. But they sure is doing quite well in both Smartwatch and Smart TV market, especially the first one, where they are the 3rd market leader in the smartwatch market share, which is even better than the Wear OS. As for ecosystem.... Whelp they also had it, in the form of the One UI. Personally I see One UI GMS compatible fork than just another Android skin/UI, Samsung know that there is no way that could break the Android and iOS duopoly in smartphone market. Hence rather then continue betting on Tizen, they revamp their TouchWiz into a pseudo OS rather than just another skin. From what I see now the One UI is similar to the Amazon Fire OS, only difference is One UI is GMS compatible one. They even built their own ecosystem on top of it, you could technically replace every single Google apps with Samsung one, such as Chrome to Internet and Assistant to Bixby. Yes they are not perfect but they exist. Only thing is on recent year instead on building a ecosystem that only work with their own system, they are more open now where their Android phone is highly compatible with both Tizen and Windows (Just look at the Note 10). Heck, even Apple started to be open these years. Personally I wanted to see tech company to be more open than compete each other to death. Each of their product has their own pros and cons, by working with each other only you could improve each other weaknesses.

20. PartTimePhoner

Posts: 24; Member since: Jun 03, 2019

"Not perfect" bixby yes samsung internet no samsung internet is actually better in my opinion. Dark mode before anyone, adblock support, reading mode kinda features and so on...

8. midan

Posts: 3019; Member since: Oct 09, 2017

We got 15 best selling phones lists from last month from all the carriers yesterday and Note 10 wasn't in any of those lists. They really should brand the Note again, but well according to news that's exactly what they are going to do next year. Note line is way too niche to keep Samsung sales good, It's been same for many years already, After Samsung release their galaxy S line they don't have any high end phone to compete with the market for the end of the year and start of the next one before new galaxy S phone comes. Consumers eyes Note line is still device mostly only for people who want to use their phone with the pen, and well hardly no-one does. So the message for this phone is just wrong if they wan't to get bigger sales. By the way we now have TV ads showing you get free galaxy buds when you buy Note 10 from everywhere. They are getting very desperate to sell these. My prediction, there won't be Note phone next year

13. Vancetastic

Posts: 1612; Member since: May 17, 2017

Ironic, considering how you complain about "bitter Android fanboys" all the time.

19. Rampage_Taco

Posts: 1085; Member since: Jan 17, 2017

The reason the note 10 isn't is that they tried the apple route and removed the AUX jack, as well as the MicroSD on the base model. It was a terrible design flaw and Samsung will make up for it with the revamped 11 series. But I imagine the 12 series will be the real game changer with the AMD powered GPU on board for a truly mobile gaming experience, seeing as Microsoft's xCloud will be up and running at that time

12. Vancetastic

Posts: 1612; Member since: May 17, 2017

Well, this one seems to be getting our little circle of Apple trolls all excited. I don't get why anyone would cheer for a company to fail. It's a lot of lost jobs, and that's not cool.

15. ShadowHammer

Posts: 208; Member since: Mar 13, 2015

Samsung seems to be proving that you don't need to be successful in China to be successful in general. Probably time to cut their losses and focus on markets where they are doing well.

24. ZEUS.the.thunder.god

Posts: 1138; Member since: Oct 05, 2011

I think this has more to do with Trade War than anything else. Samsung is reportedly moving production to India where government just announced huge tax cuts for corporations. IMO, Tax cuts in India, combined with the benefits of avoiding the US-China trade war, is probably the real reason they're moving production out of China.

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