Cheap labor will increase revenues
Company Samsung Electronics Co is the world's largest smartphone maker. So far, the organization was profitable to produce most of its products in China. However, corporation’s management decided to move production facilities to Vietnam.
One of the advantages of the location of the company's plant in Vietnam is that wages in the region is three times lower than in China. In addition, Samsung will not pay rent for 4 years and the next 12 years - half of the total cost. This will significantly increase profits and protect from the risks related to the fact that growth in sales of high-end phones slows.
In Vietnam already has production facilities Samsung. Soon the country will earn a few factories Korean manufacturer. One of them will start work in February 2014., And assembly to another phone will be fully established by 2015. They plan to produce 40% of all mobile phone companies. It is this product provides current income Samsung. It is expected that within two years the factory will produce 120 million phones per year. Today this plant is second in Vietnam among the companies that manufacture mobile devices.
Samsung overtook company Apple Inc., offering mobile phone users at a more affordable price. Thus, high-tech models cost over $ 900. However, at the same time, a simple phone can be purchased for $ 150 and cheaper.
By 2017 worldwide smartphone sales will reach 1.7 billion. The average price of a mobile phone will decrease from $337 to $265.
