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Samsung will outsource even more smartphones to China
- Samsung will reportedly increase its outsourcing of smartphone design and production to Chinese companies.
- Outsourced phones will apparently account for 25% of the company’s production this year.
- This strategy can deliver cheaper phones, although it could come at the cost of quality and design.
Samsung has outsourced the design and production of some cheap phones to original device manufacturers (ODM) since at least 2019. Now, it looks like the company plans to up the ante in this regard.
The Elec reports that Samsung will increase the production of smartphones by Chinese ODMs or joint device manufacturers (JDMs) from 44 million units last year to 67 million units this year. That means outsourced smartphones will account for 25% of Samsung’s reported production goal of 270 million units in 2024.
In addition to an increased reliance on Chinese companies for outsourced production, the news outlet reports that 28 million units will be outsourced to factories in Vietnam.
The ups and downs of outsourced Galaxy phones
The company first outsourced the production of some smartphones in 2019, reportedly in a bid to cut costs and lower prices. Samsung typically only relies on this production strategy for its cheap phones rather than high-end devices, though.
This isn’t necessarily a bad thing, as the company could use this outsourcing strategy to offer more competitively priced budget phones. However, this does run the risk of Samsung’s budget devices being lower-quality offerings as ODM partners could theoretically cut corners to make a profit.
For what it’s worth, the Samsung Galaxy A03s is reportedly an outsourced phone, and we thought it delivered good battery life and several notable quality-of-life improvements. However, we also criticized the device for its cheap construction and laggy performance.
In any event, Samsung was the only Android manufacturer in the list of top 10 best-selling smartphones in 2022 and 2023. This suggests that the outsourcing strategy is delivering cheap Android phones that people want.