To combat coronavirus, Samsung borrows from Papa John's playbook
Earlier today we told you that the coronavirus pandemic is having a chilling effect on the global smartphone industry because most companies have their handsets assembled in China by contract manufacturers like Foxconn. After shutting down production in an effort to keep workers safe, Foxconn has turned a limited number of assembly lines back on. Yesterday, Apple announced that lower iPhone production and demand in China will impact its fiscal Q2 results. China is normally the world's largest smartphone market, but the virus could cut demand in half during the current quarter.
This morning, we also pointed out that Samsung's decision to move some of its production to Vietnam has paid off for the South Korean manufacturer. Simply looking to save some money, Sammy lucked out as the impact of the deadly coronavirus on smartphone production in Vietnam has been "limited." Still, much of Samsung's supply chain is in China so the company will be impacted to some degree by the virus.
Citing a couple of anonymous sources inside the company who are familiar with the plan, Reuters reports that while Samsung expects in-store sales of its phones to suffer, it has launched a delivery service in South Korea. This comes on the heels of Samsung's Galaxy Unpacked event which introduced the company's Galaxy S20 flagship line, the foldable Galaxy Z Flip, and the premium Galaxy Buds+. With this service, consumers living in certain parts of South Korea can have a Galaxy S20, Galaxy S20+ or a Galaxy S20 Ultra 5G delivered to their location. The device can be tested out for 24 hours. After that time period expires, Samsung will pick up the handset if the consumer decides not to purchase it. While not officially announced by the company, one of the sources said, "We are introducing a new service, as coronavirus-related issues could result in less in-store experience."
In addition, Samsung has drastically reduced the number of in-store "experimental zones" where consumers can test the latest handsets. For the new Galaxy S20 phones, Samsung has opened only 9 such zones in its stores compared to the 130 that were opened last year in its South Korean stores for the Galaxy Note 10 line.
The coronavirus has forced some handset manufacturers to cancel plans to unveil their latest models. The annual Mobile World Congress (MWC) trade show in Barcelona put on by the GSMA was canceled because of the situation. Xiaomi, for one, was forced to introduce its new flagship via a livestream and other companies like Sony, Oppo and LG were also forced to abandon plans to introduce their new devices at MWC.