Samsung’s bet on foldable phones faces major test with slimmer new model

SEOUL – Samsung Electronics on July 9 unveiled thinner, lighter new foldable phones 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 like 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, Mr Choi Won-joon, said his most important mission is 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 aims to take a leadership position in AI by enhancing cooperation with external partners like Google, unlike Apple, which has been using in-house AI technology that has faced delays in adding key features.

Samsung, which held its unveiling event in New York on July 9, also showed its first smartwatches equipped with Google’s AI voice assistant, Gemini, which can make recommendations to the owner, such as good locations for a run.

Premium halo

Samsung said in April that it is pushing ahead with a premium product strategy, even as US tariffs threatened to dampen demand and raise component costs.

The smartphone maker increased the US price of its Galaxy Z Fold7 to US$1,999 (S$2,560) by 5 per cent from its predecessor Fold6, while introducing a less expensive version of its Galaxy Z Flip7 clamshell phone, the Flip7 FE, priced at US$899.

The Galaxy Z Fold7 is equipped with Qualcomm’s fast processor, Snapdragon 8 Elite, while the Galaxy Z Flip7 is powered by Samsung’s in-house Exynos chip.

Analysts said Samsung’s new models tackle some of the issues with foldable phones such as bulkiness, and will create a premium halo around the brand. The Galaxy Z Fold7 weighs 10 per cent less than its predecessor and is 26 per cent thinner.

But high prices and a lack of use cases mean foldable phones are likely to remain a niche segment, the analysts said, with data from research firm IDC showing that they account for just 1.5 per cent of the total smartphone market.

Research firm Canalys predicts that Samsung’s foldable shipments, which peaked in 2022, will remain flat or slightly declining in 2025, in line with the broader market’s flat growth, according to data provided to Reuters.

Samsung’s foldables account for 4 per cent of its total phone sales but 16 per cent of those priced more than US$800, Canalys said.

Its data shows that 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, Mr Choi said.

Mr Choi said Samsung is “working hard” to develop tri-foldable phones, which users can fold three ways, without elaborating on the launch date.

In the meantime, he said Samsung has accelerated output and shipments of smartphones bound for the US to mitigate the impact of looming US tariffs, without giving details.

Samsung produces its smartphones in Vietnam, which accounts for more than half of its phone output, as well as in South Korea and India.

Mr Choi also said Samsung has been tackling China’s export curbs on rare earths and rare earth magnets by diversifying suppliers beyond the dominant one and significantly increasing its own internal stockpiles. REUTERS