Samsung Electronics to cut China phone output as market share sinks

Credit: Reuters Studio
Published on June 5, 2019 - Duration: 01:33s

Samsung Electronics to cut China phone output as market share sinks

Samsung says it plans to cut production at a smartphone plant in China, as competition squeezes its share of the world's biggest smartphone market to less than 1%.

Pascale Davies reports.

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Samsung Electronics to cut China phone output as market share sinks

The chips are down for the world's biggest smartphone maker as it faces stiff competition in the Chinese market.

Samsung said on Wednesday it's cutting its phone output at one of its factories in China.

And according to one financial magazine- has offered staff at the Huizhou plant voluntary redundancies.

Though, when asked by Reuters on job cuts, or the extent of the production cut, Samsung declined to comment.

But did say there would be quote "some adjustment to production volume and staff" based on the market situation.

The South Korean firm is facing competition from domestic rivals, which has squeezed it share of China's smartphone market to less than 1%.

That, according to data from Strategy Analytics, compares to an estimated 20% in 2013.

But its smartphone sales in China were boosted in the three months of 2019- and were up 40% compared to the previous three months.

That was helped by cheaper mass market handsets and the promotion of its premium models.

The move comes six months after Samsung said it would close a handset plant in northeastern China, which it said was to boost efficiency.

The production cut appeared to be welcome by investors back home.

Its share price in South Korea was up 1% in afternoon trading but was down 1% in the broader market.

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