Samsung Outsources Production of Some Smartphone Models: Report

  • The company had recently shut its smartphone manufacturing operations in China
  • This is the first time after 2007 that Samsung has outsourced smartphone production
pic credits – Samsung

Samsung India, as per a report published by the Economic Times, has outsourced production of some of its smartphone models to DBG Technology India Pvt Ltd. This company is joint venture between Karbonn Mobiles chairman Pradeep Jain and Hing-Kong based DBG Holdings.

“People familiar with the development said that the No 2 smartphone maker has already begun exporting India-made phones to Middle East, Africa and Vietnam, almost three years ahead of schedule. The South Korean company was in talks with other contract manufacturers as well to expand local production, since its existing capacity is running at full and contract manufacturing route would help it meet the high demand that some of its popular models such as A and M series, they added,” read Economic Times report.

Samsung shut smartphone manufacturing operations in China

It is t be noted here that Samsung had recently shut smartphone manufacturing operations in China. Though is has one of its biggest smartphone manufacturing facilities located in India, it is still unclear why the company has opted to outsource the production to a third party. As a matter of fact, this is the first time after 2007 that Samsung India will be outsourcing smartphone production to a third party.

Samsung’s market share in China has boiled down to one per cent recently. The company has a market share of 15 per cent in China around 2013. It is also to be noted here that Apple has started retailing assembled in India iPhone XR models recently. These models are being assembled at Foxconn’s facility in the country. The govt of India had recently slashed base corporate taxes in the country as well.

The company, as per a recent IDC report, registered a strong 16.6 per cent YoY growth in 2Q19 fueled by newly launched Galaxy A series across low and mid-price segments. Galaxy A10 and A2 Core were amongst the top five models overall for the market. The vendor was also offering attractive channel schemes to clear the stocks of Galaxy J series. Galaxy M series (exclusive online till the end of 2Q19) saw price reductions which helped retain the 13.5 per cent market share in the online channel in 2Q19 for Samsung.