Samsung To Outsource Low-End Smartphone Production, Make Premium Devices Itself [Rumor]

Samsung’s numerous manufacturing plants are more than capable of manufacturing its own smartphones as well as components for other OEMs. Though it appears that the company might be shifting its strategy. Local media reports coming in from Korea suggest that Samsung will accelerate outsourcing production of low-end and mid-range smartphones to Chinese subcontractors, whereas it will use its own facilities to handle premium smartphone production.

The Galaxy Trend Duos is the most successful outsourced smartphone that Samsung sells, production has exceeded 10 million units. Zhonghuan Telecommunication, an outfit based in Tianjin, manufactures the Galaxy Trend Duos. A number of Samsung low-end and mid-range devices often become a hit, particularly in emerging markets. By outsourcing production, the company will be able to relieve pressure on its own plants without having on compromise on sales and profits brought in by these smartphones. Samsung is already rumored to focus more on low-end devices next year, apparently the company believes that the premium market is quite saturated right now, so in the coming years substantial growth will be driven by the low-end devices. It remains to be seen if Samsung will opt to outsource production to joint ventures it is a part of, like Zhonghuan, or if it will hand over production to totally independent subcontractors.

Adnan Farooqui
Categories: Cellphones
Tags: Samsung