On November 18, it was reported by Reuters that in order to reduce the manufacturing cost of some mobile phones, Samsung plans to outsource the production of some Galaxy A mobile phones to Wintech. Samsung closed its own factory in China last month, hoping to reduce the production cost of low-end mobile phones in order to reduce the retail price of mobile phones in some regions.
It is reported that the mobile phones produced by Wentai Technology will be shipped to Southeast Asia and South America. A Samsung insider said: "In order to maintain the competitiveness with Huawei and other Chinese mobile phone manufacturers, cost cutting has become crucial."
According to a source, Samsung plans to ship 60 million mobile phones produced in China overseas, while the company expects to produce 300 million mobile phones in 2020. Some people may worry that the quality of Samsung mobile phones will decline after ODM takes over. Samsung said that it will adopt the same quality inspection and standards for these mobile phones, and they are committed to producing high-quality products in China.
ODM has some say in the design of mobile phones, including the low-end Galaxy A models outsourced to Wentai Technology. Wentai Technology will produce the Galaxy A6s, which was released last October.
Counterpoint, a research company, said that ODM could obtain all the parts needed to manufacture a smart phone worth 150 to 250 dollars at a price lower than Samsung's purchase of parts in China. If Samsung decided to produce these phones in China, it would pay 10% to 15% more for the parts. A source working in the supply chain said that Wentai Technology can obtain some parts at a price 30% lower than Samsung's in Vietnam, and Samsung currently produces some models in Vietnam.
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