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Samsung poised to benefit from China virus woes

Published : Wednesday, 19 February, 2020 at 12:00 AM  Count : 215

SEOUL, Feb 18: Samsung Electronics stands to be a major beneficiary of the China production problems announced by rival Apple Inc on Monday, reaping the rewards of a decade-long bet on low-cost smartphone manufacturing in Vietnam.
Half of Samsung's smartphones are now made in Vietnam, where the coronavirus that has crippled the China operations of Apple and many other firms has so far had only a limited impact on its production.
Apple said on Monday it would not meet its revenue guidance for the March quarter due to the coronavirus impact on both production and sales in China, where most iPhones are made. Chinese smartphone maker Xiaomi Corp last week also flagged a hit to its March quarter sales.
Huawei, another major Samsung rival, has not announced any production problems, but Samsung insiders, analysts and suppliers expect it will also be hit hard due to its heavy reliance on Chinese manufacturing and parts. Many Chinese and foreign firms have begun to re-open China factories that were idled for weeks, but shortages of workers and other problems have in many cases kept output to a minimum.
Samsung has also largely ceded the China market to its rivals in recent years, meaning it won't suffer from the store closures and drop in demand that is hitting Apple and others.    --Reuters










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