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TheStreet Open House

Why Chinese Aren't Boycotting Samsung

Stocks in this article: NOK AAPL

TAIPEI, Taiwan ( TheStreet) -- When I lived in China in 2005 and the country's youth declared a guerrilla boycott against Japanese products over unburied World War II issues, common Chinese people had to be careful about where they parked their Toyotas.

The boycott also forced Chinese locals to cloak their Nikon cameras as they photographed a series of anti-Japanese mass street protests. Eventually, Chinese authorities, though the most gushing opponents of Japan, asked the public to stop. We Chinese, you see, make and already own Japanese stuff, big brother told the littler ones.



One would have expected a similar response to Korean electronics giant Samsung after labor rights groups stung it in November with claims of exploiting some of its workers in China.

But even though many Chinese consumers feel jealous of South Korea for its clean, quick rise to prosperity, they were barely stirred (let alone outraged) by the reports of teenage workers, required overtime and blank contracts.

Normally they would be quick to vent, but this time they're unfazed because Samsung is making phones they want and can afford and that are better than homegrown alternatives.

Samsung has surpassed Nokia (NOK - Get Report) as the most "commonly used smartphone brand" in China since the third quarter of 2012, a division of global market research firm TrendForce said in a March 19 consumer research report. Samsung claims a 20.3% market share, leaving Nokia -- a long-standing favorite since presmartphone days -- with 14.3%.


So investors might buy a few Samsung shares if they haven't already, based on the Android OS overachiever's worldwide showing, hold shares of Nokia until it starts to make a comeback and take another bite into Apple (AAPL - Get Report) shares (find out why later).

Whether or not workers were exploited, Samsung was calling out to China last year. It stepped up production in the country to make more handsets locally, which should mean lower prices for lack of shipping costs.

Samsung twinned increased production with an expansion of its sales network to more Chinese consumers. Chinese consumers are numerous, we all know, and if the government gets its way in retooling the economy, they will spend more of their hard-saved money and cut China's historic but increasingly squeamish reliance on industrial development.

Key components of that extension are mass marketing, the pro-China price range of Samsung smartphones and dependable after-sales service.

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