Samsung gambles on its slimmer but costlier new foldable phones to fend off Chinese challengers

Daily Maverick

5 days ago

Yet analysts predict foldable smartphones will remain a niche segment, now accounting for just 1.5% of the market.
Samsung Electronics unveiled thinner, lighter new foldable phones in New York on 9 July, as it aims to fend off Chinese competition in the higher-­margin, premium segment that remains untapped by archrival Apple.
The stakes are high. The South Korean company lost its global smartphone crown to Apple in 2023 and faces growing com­petition from Chinese rivals such as Huawei and Honor.
Meanwhile, Samsung's mainstay chip business has suffered a profit slump stemming in part from its delayed supply of artificial intelligence (AI) chips to Nvidia.
Samsung's mobile president and chief operating officer, Choi Won-joon, said his most important mission was to make Samsung a leader in AI-powered smartphones.
'I believe that foldable phones, integrated with AI features, are ready to become mainstream by offering [a] unique, differentiated experience,' he told Reuters in his first media interview since being promoted in March.
He said Samsung aimed to take a leadership position in AI by enhancing cooperation with external partners such as Google – unlike Apple, which has been using in-house AI technology that has faced delays in ­adding key features.
Samsung also unveiled its first smartwatches equipped with Google's AI voice assistant, Gemini, which can make recommendations to the wearer, such as good locations for a run, for instance.
Samsung said in April that it was pushing ahead with a premium product strategy as US tariffs threatened to dampen demand and raise component costs.
The smartphone maker increased the US price of the Galaxy Z Fold 7 by 5% from its predecessor Fold 6, and it will cost $1,999. It also introduced a less-expensive version of its Galaxy Z Flip 7 clamshell phone, Flip 7 FE, priced at $899.
The Galaxy Z Fold 7 is equipped with Qualcomm's fast processor, Snapdragon 8 Elite, whereas the Galaxy Z Flip 7 is powered by Samsung's in-house Exynos chips.
Analysts said Samsung's new models tackled some of the issues with foldable phones, such as bulkiness, and would create a premium halo around the brand. The Ga­laxy Z Fold 7 weighs 10% less than its predecessor and is 26% thinner.
But high prices and a lack of use cases mean foldable phones are likely to remain a niche segment, the analysts said. Data from the research firm IDC showed they account for just 1.5% of the total smartphone market.
Research firm Canalys predicts that Samsung's foldable shipments, which peaked in 2022, will remain flat or decline slightly in 2025. This is in line with the broader market's flat growth, according to data provided to Reuters.
Samsung's foldable smartphones account for 4% of its total phone sales, but 16% of those priced over $800, Canalys said.
Its data shows Samsung's dominance of the foldable phone segment is being eroded by Honor and Huawei, which are enjoying strong sales, especially in China.
Samsung will focus on the US, Europe and South Korea for foldable phone sales, Choi said at the unveiling on Wednesday.
He said Samsung was 'working hard' to develop tri-foldable phones, which users can fold three ways, without elaborating on the launch date. Reuters/DM
This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.