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Weak sales have Samsung considering suspension of Chinese factory operation
- Samsung’s market share in China has dropped from 20 percent to one percent in five years.
- As such, a Samsung Chinese factory could close if the company can’t find another way to make it cost-effective.
- This is yet another major issue plaguing the world’s largest smartphone maker this year.
Tianjin Samsung Telecom Technology is a mobile phone factory operating in Tianjin, China. However, there is a possibility that it might not be operating there much longer.
A new report from Reuters suggests that Samsung is considering suspending operations at the plant due to weak Chinese sales of Samsung smartphones.
The Samsung plant in Tianjin reportedly produces 36 million mobile phones per year.
The report is clear that suspending operations at the factory is only one of several possible plans of action. Even so, the fact that Samsung is even considering such a drastic move is a real sign of just how much the mobile industry has changed in China in only a few years.
Five years ago, Samsung’s mobile market share in China reflected that of its global percentage: around 20 percent. Today, Samsung’s mobile footprint in China is at about one percent, due to Chinese companies like Huawei and Xiaomi taking ever-larger portions of Samsung’s piece of the pie.
When you examine the drastic market share change in China along with the sales drops happening in India, a sobering reality is clear: Samsung is quickly losing its footing in some of the biggest mobile markets in the world.
A few weeks ago, Samsung posted its quarterly profits report for Q2 2018. In the report, the company revealed that global sales for the Samsung Galaxy S9 were lower than expected and that the company would push up the release of the Samsung Galaxy Note 9 to help compensate.
Samsung points to the overall decline in smartphone sales around the world as the main culprit for its sales issues. However, it’s hard to see it that way when the companies that directly threaten Samsung – HUAWEI, Xiaomi, and even smaller companies like OnePlus – are all having fantastic years.
We will monitor the status of the possible closure of this Chinese plant and will update this article accordingly if we see any new information.
NEXT: Calling it: The Galaxy Note 9 won’t sell as well as the Note 8