Samsung takes margin hit to strengthen foldable leadership
Samsung Electronics unveiled its latest foldable smartphones — the Galaxy Z Flip7 and Z Fold7 — at the Galaxy Unpacked 2025 event in New York on Wednesday, drawing attention for keeping price hikes to a minimum despite upgraded features and rising trade tensions.
Samsung has decided to maintain the price of the Flip7 in both Korea and the US, while the Fold7 saw a modest increase of around 150,000 won ($109), or about 6 percent, from its predecessor — a smaller hike than the 10 to 20 percent anticipated by industry watchers ahead of the launch.
'Pricing is always a key consideration with new product launches,' Roh Tae-moon, acting head of the device experience division, said in a press briefing following the unveiling event. 'There were significant innovations in this year's models, which increased production costs. To expand foldable phones and democratize AI experiences, we decided to absorb those costs internally.'
The Galaxy Z Fold7 and Flip7 come with slimmer designs and enhanced AI capabilities, placing additional pressure on the tech giant's pricing strategy. Industry watchers said that Samsung internally debated the necessity of price hikes, balancing the products' upgraded value against concerns over market share erosion.
'Given the Z Flip series' recent sales decline, a price hike could further dampen its competitiveness,' said an industry source who requested anonymity. Sales of the Z Flip6 last year reached 2.89 million units, a 21 percent decrease from the 3.66 million sold for the previous year's Z Flip5. In contrast, Z Fold6 sales rose 11 percent on-year to 2.32 million units.
Another major variable was the potential impact of new US tariffs. US President Donald Trump recently announced plans to impose tariffs of at least 25 percent on smartphones and appliances manufactured in countries like China and Vietnam — a move that would affect smartphone-makers such as Samsung and Apple.
While the Z Flip7 and Z Fold7 are largely produced at Samsung's facilities in Bac Ninh and Thai Nguyen, Vietnam, the latest negotiations between the US and Vietnam have reportedly reduced the expected tariff rate on Vietnamese-made products from a planned 46 percent down to around 20 percent. That allowed Samsung to mitigate drastic price fluctuations in the US market.
Samsung held global pricing steady for its Galaxy S25 lineup earlier this year, even amid rising material costs and exchange rate volatility.
Referring to growing US pressure for onshore semiconductor and electronics production, Roh said, 'Samsung's key strength has long been its globally distributed manufacturing network. We are fully prepared to respond swiftly to changing trade dynamics in the US and other major markets.'
Apple is rumored to be preparing its first foldable iPhone for release in the second half of next year. Industry watchers expected the device to carry a premium price tag of $2,000 to $2,500 even before potential US tariffs were factored in. If current trade policy conditions worsen, prices could surge further, potentially reshaping the competitive dynamics of the global foldable market.
Another anonymous industry source said, 'With Apple relying on China for about 80 percent of its iPhone production, the potential implementation of reciprocal tariffs could make the US tech giant's foldable phone about $100 to $300 more expensive than the Galaxy Z Fold7."
"It would place Apple in a dilemma — either risk losing market share due to higher prices or absorb the additional cost internally, thereby compromising profitability," the source added.
Meanwhile, the Galaxy Z Flip7 and Z Fold7 will be released sequentially in global markets, including Korea, starting from July 25. Preorders in the domestic market are to begin Tuesday.
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