Samsung's share of the smartphone market in China amounted to only two percentage points in the third quarter of the year and will drop to approximately 1.6 percent during Q4 2017, Strategy Analytics reported earlier this month. The Seoul-based original equipment manufacturer is currently estimated to be the ninth largest phone vendor in the Far Eastern country, the biggest smartphone market on the planet, with the company seemingly not being able to endure tough competition from local OEMs and Apple.
Samsung opted for some major restructurings of its China-based operations over the course of this year, having decided to change its leadership and close a number of retail locations while opening other brick-and-mortar stores. None of the company's efforts appear to have yielded any significant results in the near term, with its prospects in China remaining grim. According to some estimates and Samsung's previous statements on the matter, the tech giant laid off around 20,000 employees in China since 2015 and may be forced to make additional cuts if its local performance doesn't improve going forward. Samsung traditionally insists on healthy profit margins on all kinds of consumer electronics — smartphones included — but that strategy proved to be one of the main inhibitors of its prospects in China where aggressively priced mobile devices that offer good value for money are in abundance.
Another factor detrimental to the company's commercial performance in China is the anti-South Korean sentiment that became prevalent in the Far Eastern country in recent times, being largely prompted by tensions over American-made THAAD anti-missile system that Seoul voted to set up alongside the border with North Korea. This state of affairs is believed to have prompted Beijing to lead a major campaign against Korean companies through state-sponsored media, many of which went as far as to openly mock Samsung and its products over the course of this year. The largest phone maker in the world held a fifth of the Chinese market in 2013 but has been steadily declining ever since, with its local issues seemingly having no end in sight. Samsung is still unwilling to give up China due to the sheer volume of the market and its potential impact on the company's bottom line, though it's currently unclear how the OEM is planning to attempt reviving its local operations in 2018 and beyond.