A recent report claims that Samsung Electronics could benefit massively from Apple’s manufacturing problems in China caused by the coronavirus spreading throughout the country. Apple’s iPhone production relies heavily on China, while Samsung has distributed its production facilities throughout Asia.
Reuters reports that Samsung Electronics stands to benefit from the production problems in China caused by the outbreak of the Coronavirus which is plagueing company’s such as Apple. This is due to the fact that Samsung has taken advantage of low-cost smartphone manufacturing in Vietnam, where the virus has had a limited effect on production.
Half of Samsung’s smartphones are manufactured in Vietnam which has been relatively unaffected by the Coronavirus. Apple stated this week that it would not meet its revenue guidance for the March quarter as a result of production issues and sales in China where most iPhones are made. Chinese tech firm Xiaomi Corp also stated last week that its March quarter sales were being affected by the virus.
Another major Samsung rival, Huawei, has not announced any production issues but Samsung insiders, analysts, and suppliers reportedly expect that the firm will also be affected due to its reliance on Chinese manufacturing. Many Chinese factories have reopened but shortages of workers and other production issues have kept output to a minimum.
An individual with knowledge of Samsung’ssupply chain told Reuters: “Samsung is better positioned to weather the virus fallout than its formidable rivals such as Huawei and Apple. The virus exposed China risks. We feel fortunate that we were able to escape the risks.”
Another individual with knowledge of the situation stated: “Samsung does not say it publicly. But it is relieved.” Samsung also recently launched a new smartphone delivery service for customers to test its new products as the spread of the Coronavirus has resulted in the cancelation of a number of promotional events and affected in-store sales.