Samsung’s Bold Move: Outsourcing Screens to Preserve Market Dominance

Earlier reports suggested that the Samsung Galaxy A57 might feature Chinese OLED panels instead of Samsung’s own screens, and confirmation has now emerged. Business Korea indicates that, to control smartphone pricing growth, Samsung has taken an unprecedented step: the upcoming mid-range Galaxy A57 will utilize OLED displays from China’s China Star Optoelectronics Technology (CSOT) rather than Samsung Display panels.

This shift is crucial as price increases in the mid-segment, which includes the Galaxy A series, could prove fatal-especially since the Galaxy A series is a significant revenue driver in India, Southeast Asia, and Latin America. Last year, Samsung ceded its position as the largest smartphone maker globally to Apple. The situation is worsened by setbacks in strategic markets: in Vietnam, Samsung’s market share fell from 31% to 28%, while Xiaomi (23%) and Oppo (17%) expanded their presence. Apple further disrupted the market by releasing its first budget iPhone 16e in three years. By using more affordable CSOT displays in the widely-sold Galaxy A57, Samsung aims to maintain price levels. This strategy seeks to stall the advance of Chinese brands and reclaim market share, given that consumers in developing nations are extremely price-sensitive.

Samsung holds an ace in vertical integration. The company manufactures memory, cameras, and boards within its group, providing flexible cost management compared to competitors reliant on external suppliers. Notably, today the Chinese regulator revealed specifications of the Samsung Galaxy A57, and yesterday a case manufacturer showcased its design. The introduction of these new displays marks a tactical decision as part of Samsung’s broader plan to reinforce its standing in the market, leveraging internal production capabilities to counteract external pressures from competitors and shifting market dynamics.