Samsung Electronics Co. said it aims to outsell sales of its foldable phones from the now-defunct Note series of smartphones as it seeks to increase profitability of its wireless division.
SeongJoon Cho | Bloomberg | Getty Images
Samsung hopes to make its foldable phones mainstream and says Thursday it aims to see sales of such devices outpace its popular Note series of handsets.
The South Korean electronics giant is looking to boost sales of its foldable cellphones to boost profitability at its mobile division, which has been hit by rising material costs and slowing consumer demand.
Samsung first released the Note smartphone model in 2011. It has been successful over the years due to its larger screen size at a time when its competitors had smaller displays.
But as smartphones got bigger, including Samsung’s flagship S-series of devices, the Note was eventually discontinued. Instead, the company’s Galaxy S Ultra model filled the gap. The Note 20, launched in 2020, was the last phone in Samsung’s lineup.
Samsung’s first folding phone, the Galaxy Fold, was launched in 2019 after some technical problems. Since then, the company has released a number of other models.
But foldable phones are still a niche part of the overall smartphone market. Samsung hopes to make them “mainstream,” according to its earnings report released on Thursday, to boost the profitability of its smartphone division.
“In the second half of the year we will continue to maintain the sales momentum of our S Series and also leverage the new foldable series that is being introduced to deliver sales volume in excess of the sales volume we previously reported with the Note Series” , said Sung Koo Kim, vice president of the company’s mobile experience division, on a conference call on Thursday.
It’s unclear what timeframe Samsung is referring to for leaflets to take over Note sales as the latter device is now being discontinued. Samsung could not clarify this when asked by CNBC.
According to IDC, Samsung has shipped 190 million Note devices over the phone’s lifetime. So far, Samsung has shipped over 10 million foldable phones.
Samsung has shipped about 12 million Note 20 phones, the last in the series, and about 14 million Note 10 devices. That compares to 8 million Galaxy Z Flip 3 and Galaxy Z Fold 3 devices, the latest Samsung foldable phones.
The company is preparing to release new foldable devices next month.
“It makes sense for Samsung to bet on foldable devices: it’s a premium, high-margin product that drives average selling prices and differentiates Samsung from the competition,” Bryan Ma, an analyst at IDC, told CNBC.
“While the Note line still has dedicated fans, it’s also now a decade old, so executing on the company’s foldable ambitions keeps the company at the forefront.”
In fact, profitability in its smartphone division is the primary focus for Samsung. In the second quarter, mobile earnings fell sequentially due to higher costs and “negative currency effects,” Samsung said. However, revenue increased year-on-year due to increased sales of premium models such as the S22 smartphone and Tab S8 tablet series.
Samsung’s Kim expects the smartphone market to stagnate or grow slightly in the second half of the year. Foldable phones will be an important part of Samsung’s drive to increase profitability.
The company said it will “ensure solid profitability by targeting sales of foldable devices that outperform the Galaxy Note series and fully mainstream foldable devices by offering a differentiated consumer experience enabled through global partnerships.” becomes”.