Samsung Electronics to double down on foldable phones this year Korean tech giant expects foldable phone market to double in size this year
Translated by Ryu Ho-joung 공개 2022-05-03 08:07:07
이 기사는 2022년 05월 03일 08:05 thebell 에 표출된 기사입니다.
Samsung Electronics is doubling down on its foldable smartphones this year in response to rapid growth in the foldable phone market.“We expect the foldable phone market to double in size this year compared to last year, driving up the popularity of Galaxy Z series close to that of Galaxy S models,” Kim Sung-koo, vice president of Samsung Electronics' Mobile Experience division, said in a first-quarter earnings call on April 28, suggesting the company's intention to devote efforts to market its foldable models this year.
Samsung Electronics, which announced its first foldable phone in 2019, is leading the market, with a global market share of 85%. Its foldable phone sales rose more than fourfold year-on-year to eight million in 2021, according to data from Counterpoint Research.
In its earning call, Samsung Electronics seemed confident of maintaining its market lead in the face of intensifying competition from rivals. Chinese companies such as Huawei, Oppo and Xiaomi launched their own foldable phone models recently. US tech giant Google is also expected to unveil its first foldable smartphone, Pixel Notepad, in the fourth quarter of this year.
Samsung Electronics is reportedly considering more than doubling production of its upcoming foldable phone series, Galaxy Z Fold 4 and Galaxy Z Flip 4, compared to their predecessors, with a possibility of reduced price tags. “We will make efforts to maximize the effect of the launch of new products and customer experience,” Kim said.
The South Korean tech giant’s confidence in its ability to maintain its grip in the foldable phone market is partly attributed to the company’s strong supply chain network despite supply chain issues, such as disruptions due to the war in Ukraine and the chip shortage, plaguing global companies.
“Our strengthened partnership with suppliers and long-term contracts will help iron out parts supply issues in the second quarter,” Kim said in the earnings call.
Display panels, the most important part in Samsung Electronics’ foldable smartphones, are produced by Samsung Display. Chinese firms such as BOE and China Star Optoelectronics Technology (CSOT) also developed foldable displays but their products are obviously less competitive than those made by Samsung Display. Xiaomi, for instance, started using Samsung Display’s panels for its second generation foldable phone, Mi Mix Fold 2, whereas its predecessor was equipped with CSOT’s display panels.
Samsung Display can produce about 17 million foldable display panels a year, most of which are taken by Samsung Electronics. That was reportedly one of the reasons Apple decided to delay its launch of a foldable iPhone. This means Samsung Electronics’ dominance in the global foldable phone market will likely continue for some time.
Samsung Electronics has also build up strong relationships with KH Vatec and S Connect, the two leading hinge suppliers in South Korea. The market for foldable smartphone hinges, which require sophisticated technology, has a high barrier to entry.
Diversifying its supply chain is another strategy pursued by Samsung Electronics. The Galaxy Z Fold 3 and Galaxy Z Flip 3 models were equipped with batteries made by Samsung SDI, but the smartphone maker is currently considering using LG Energy Solution’s batteries in its upcoming foldable models.
“It is possible Samsung Electronics may increase production of foldable smartphones more than expected as part of efforts to offset the negative impact of the Galaxy S22 throttling scandal,” an analyst at NH Investment & Securities said. (Reporting by Hyun-ji Sohn)
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