#Smartphone makers used to outsource to #ODM in order to compensate for their own limitations in R&D and production capacity. However, as the market became increasingly competitive, different cell phone makers sought competitive advantages through product differentiation by strengthening their internal R&D teams, in particular for high-end products. This had the side effect of weakening the ODM industry.
In 2019, #Samsung is seeking to retool its mobile strategy by keeping its main R&D efforts focused on flagship phones. But Samsung outsources the development of some of its midrange and entry-level products to ODM and #JDM.
This leverages the ODM’s supply chain structure and R&D support and allows Samsung to integrate new supply chains, in addition to achieving cost reduction. The company hopes, in so doing, to find the perfect balance between existing market profitability and shipment. #TrendForce is optimistic regarding Samsung’s change in strategy.
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