Samsung Electronics Co. said it aims for sales of its foldable phones to outpace its now-discontinued Note series of smarpthones as it seeks to boost profitability in its mobile division.
Seong Joon Cho | Bloomberg | Getty Images
Samsung hopes to make its foldable phones mainstream, saying on Thursday that it aims for sales of the devices to overtake its popular Note series of handsets.
The South Korean electronics giant is looking to push sales of its foldable handsets to boost profitability in its mobile division, which has been hit by rising material costs and falling consumer demand.
Samsung first launched the Note smartphone model in 2011. It has found success over the years due to its larger screen size at a time when rivals had smaller screens.
But as smartphones continued to get bigger, including Samsung’s flagship S-series devices, the Note was eventually discontinued. Instead, the company’s Galaxy S Ultra model filled the void. The Note 20, released in 2020, was the last phone in the Samsung series.
Samsung’s first foldable phone, the Galaxy Fold, was launched in 2019 after some technical issues. Since then, the company has released a number of other models.
But foldable phones are still a niche in the overall smartphone market. Samsung hopes to turn them into “mainstream,” according to its earnings statement released Thursday, in a bid to boost profitability in its smartphone division.
“In the second half of the year, we will continue to maintain the sales momentum of our S series and also use the new foldable series that will be launched in order to provide a sales volume higher than the sales volumes we used to report with the series. Note,” Sung Koo Kim, vice president of the company’s mobile experience division, said in a conference call Thursday.
It’s unclear what time frame Samsung is referring to for foldables to resume Note sales, given that the latter device is now discontinued. Samsung was unable to clarify when contacted by CNBC.
For reference, Samsung shipped 190 million Note devices over the phone’s lifetime, according to IDC. So far, Samsung has shipped over 10 million foldable phones.
Samsung has shipped around 12 million Note 20 phones, the last in the series, and around 14 million Note 10 devices. This compares to 8 million Galaxy Z Flip 3 and Galaxy Z Fold 3 devices, the latest foldable phones Samsung.
The company is gearing up to launch new foldable devices next month.
“It makes sense that Samsung is placing its bets on foldables: it’s a high-end, high-margin product that drives up average selling prices and sets Samsung apart from the competition,” said IDC analyst Bryan Ma, at CNBC.
“While the Note line still has a dedicated fan base, it’s also a decade old now, so putting the company’s ambitions on foldables helps the company stay ahead of the curve.”
Indeed, the profitability of its smartphone division is Samsung’s main objective. In the second quarter, profits in the mobile business fell quarter over quarter due to rising costs and “unfavorable currency effects”, Samsung said. However, revenue grew year-over-year due to increased sales of high-end models such as the S22 smartphone and the Tab S8 series of tablets.
Samsung’s Kim expects the smartphone market to hold steady or grow slightly in the second half. Foldable phones will be a key part of Samsung’s drive to increase profitability.
The company said it will “deliver strong profitability by targeting sales of foldables that outperform the Galaxy Note series and all-consumer foldables by delivering a differentiated consumer experience through global partnerships.”