Samsung Mobile Chief Expresses Openness to Financial Loss on New Foldable Smartphones to Increase Shipments and ‘Democratize AI Experiences’ for Consumers

Since its landmark debut of the Galaxy Fold six years ago, Samsung has aimed to revolutionize the smartphone industry with its innovative foldable design. While the launch sparked enthusiasm and high expectations for foldable devices to dominate the market, the reality has been different. Manufacturing costs have surged, and the anticipated uptake in these unique smartphones has not materialized as predicted. In light of this, TM Roh, Samsung’s mobile division head, remains unfazed by the recent dip in shipment numbers. He has expressed a willingness to accept financial losses on new foldable models as part of a broader strategic vision.

Strategic Focus on Shipments Over Immediate Profits

Recent reports from Sammobile indicate that analysts had predicted a significant 20% price increase for the upcoming Galaxy Z Fold 7 and Galaxy Z Flip 7. Contrary to these forecasts, Samsung has implemented only a modest single-digit price adjustment. This unusual decision stems from a strategic choice to prioritize shipment volumes over immediate profit margins, as underscored by The Korea Herald. TM Roh elaborates on this rationale below:

“Pricing is always a key consideration with new product launches. 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 current landscape, marked by geopolitical tensions and persistent global inflation, has certainly impacted production costs for Samsung. The integration of advanced chipsets, such as the Qualcomm Snapdragon 8 Elite and Exynos 2500, compounds these expenses. Nevertheless, Samsung’s decision to keep prices relatively stable comes against the backdrop of declining sales for last year’s Galaxy Z Flip 6, which saw a notable 21% decrease in shipments compared to its predecessor, the Z Flip 5.

Meanwhile, Huawei continues to reign supreme in the Chinese foldable smartphone market, having made waves with the introduction of the world’s first commercial tri-fold device, the Mate XT. This achievement is particularly impressive, given the constraints imposed by U. S.export restrictions. Samsung may view Huawei as a substantial competitor, prompting it to stabilize prices to increase its market share in China, the world’s largest smartphone market.

Looking ahead, Samsung is also rumored to be developing its own tri-fold smartphone, potentially dubbed the Galaxy G Fold, with an expected announcement in the fourth quarter. Initial production has been limited, with some reports suggesting it began in September. This could indicate a cautious approach to gauge market interest before committing to a wider launch.

For more information, visit The Korea Herald.

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