Seoul — On Wednesday, Samsung Electronics revealed its latest foldable smartphones, designed to be both thinner and lighter. This move is part of the company’s strategy to compete with Chinese brands in the premium market, which remains a segment largely untapped by Apple.
With Samsung’s recent loss of its global smartphone leadership to Apple, the pressures are mounting. The South Korean tech giant is also facing steep competition from Chinese players like Huawei and Honor.
Adding to these challenges, Samsung’s chip division has seen decreased profits, largely due to delays in supplying AI chips to Nvidia.
Driving AI Innovation in Smartphones
Samsung mobile president and COO Choi Won-joon emphasized the company’s goal of becoming a leader in AI-driven smartphones. In an interview with Reuters, he stated, “I believe that foldable phones, integrated with AI features, are ready to become mainstream by offering a unique, differentiated experience.”
To strengthen its AI ambitions, Samsung plans to collaborate with external partners, including Google. This is in contrast to Apple, which primarily relies on its own AI developments, often facing delays in rolling out crucial enhancements.
Introducing Advanced Smartwatches
In addition to its phones, Samsung debuted its first smartwatches featuring Google’s AI voice assistant, Gemini. This assistant offers personalized recommendations, such as optimal locations for a run.
Adapting to Tariff Challenges
In response to potential U.S. tariffs threatening demand and increasing costs, Samsung announced a commitment to a premium product strategy in April. They raised the price of the Galaxy Z Fold 7 by 5% to $1,999 compared to the previous Fold 6, while launching a more budget-friendly option with the Galaxy Z Flip 7 FE priced at $899.
The Galaxy Z Fold 7 features Qualcomm’s Snapdragon 8 Elite processor, whereas the Galaxy Z Flip 7 operates with Samsung’s own Exynos chips. Analysts noted that the new models effectively address common concerns surrounding foldable phones, particularly their bulkiness, making the Fold 7 10% lighter and 26% thinner than its predecessor.
The Future of Foldable Phones
Despite these advancements, analysts believe that the high cost and limited use cases will keep foldable devices in a niche market. Currently, data from IDC indicates these phones represent only 1.5% of the overall smartphone market.
Looking ahead, research firm Canalys predicts that Samsung’s foldable shipments may plateau or even see slight declines by 2025, mirroring trends in the overall market. While Samsung’s foldable smartphones made up 4% of total phone sales, they comprised 16% of sales exceeding $800.
However, competition is intensifying, with Honor and Huawei gaining traction, particularly within China. During the unveiling event held in New York, Choi indicated that Samsung would concentrate its efforts on foldable phone sales primarily in the US, Europe, and South Korea.
Innovations on the Horizon
Following the launch, TM Roh, president and acting head of Samsung’s device experience division, shared that the company is working on a tri-foldable phone, capable of folding in three distinct ways, aiming for a release before the year ends.
Choi also discussed efforts to accelerate the output and shipment of smartphones to the US to counteract the impact of impending tariffs, although specifics were not disclosed. Most of Samsung’s smartphones are manufactured in Vietnam, which accounts for over half of its production, along with facilities in South Korea and India.
Diversifying Supply Chains
In light of China’s restrictions on rare earth exports, Choi stated that Samsung is diversifying its suppliers and bolstering its internal stockpiles significantly.
How do you think Samsung’s new foldable smartphones will perform in the competitive market ahead?