In an effort to counter Chinese competition in the higher-margin, premium market that archrival Apple (AAPL.O) has yet to penetrate, Samsung Electronics introduced lighter, thinner new foldable phones on Wednesday.
The stakes are really high. Apple overtook the South Korean corporation as the world’s leading smartphone manufacturer in 2023, while Chinese competitors Huawei and Honour are becoming more and more formidable.
In the meantime, Samsung’s core chip division has seen a decline in profits, partly as a result of its delayed delivery of AI processors to Nvidia (NVDA.O).
Choi Won-joon, the chief operating officer and head of Samsung’s mobile division, stated that his top goal was to establish Samsung as a pioneer in AI-powered smartphones.
In his first public appearance since being marketed in March, he told Reuters, “I think foldable phones, integrated with AI features, are ready to become mainstream by offering a unique, differentiated experience.”
In contrast to Apple, which has been utilising in-house AI technology that has had delays in adding important features, he said Samsung wants to seize the lead in AI by strengthening collaboration with outside partners like Google (GOOGL.O).
In New York, Samsung also debuted its first smartwatches with Google’s AI voice assistant, Gemini, which can suggest places for the owner to go running, for instance.
LUXURIOUS HALO
As U.S. tariffs threatened to reduce demand and drive up component costs, Samsung announced in April that it was moving forward with a premium product strategy.
While launching a less costly version of its Galaxy Z Flip 7 clamshell phone, the Flip 7 FE, priced at $899, the smartphone manufacturer raised the price of the Galaxy Z Fold 7 in the United States to $1,999, a 5% increase over the previous Fold 6.
Samsung’s own Exynos chips power the Galaxy Z Flip 7, while Qualcomm’s (QCOM.O) fast Snapdragon 8 Elite processor powers the Galaxy Z Fold 7.
According to analysts, Samsung’s latest models addressed some of the drawbacks of foldable phones, like their thickness, and would give the company a more upscale image.
The Galaxy Z Fold 7 is 26% smaller and weighs 10% less than its predecessor.
According to statistics from research firm IDC, foldable phones only make up 1.5% of the smartphone industry; thus, researchers predicted that they would remain a niche product due to their expensive cost and lack of applications.
According to data given to Reuters, research firm Canalys projects that Samsung’s foldable shipments, which peaked in 2022, will either stay constant or slightly decline in 2025, in accordance with the flat growth of the market as a whole.
According to Canalys, Samsung’s foldable phones make up 16% of its phones that cost more than $800, but only 4% of its total phone sales. According to its research, Honour and Huawei, who are seeing great sales, particularly in China, are undermining Samsung’s hegemony in the foldable phone market.
According to Choi, Samsung, which conducted its unveiling event in New York on Wednesday, would concentrate on selling foldable phones in the US, Europe, and South Korea.
