Samsung Unveils New Foldables Amidst Apple Rivalry, Chip Costs

Samsung Electronics has introduced a phone roughly the size of a passport, alongside adjusting the prices of two updated foldable models. The South Korean technology firm faces increasing memory chip costs and anticipated competition from Apple within the expanding foldable smartphone segment, according to a Reuters report. This launch event occurred in London.

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The newly unveiled Galaxy Z Fold8, designed with a wider screen for users who frequently consume video content, has been priced at USD 1,899. Samsung concurrently increased the cost of its premium Galaxy Z Fold8 Ultra and the clamshell design Flip8 by USD 100. These updated models are now available at USD 2,099 and USD 1,199 respectively. All three new Galaxy Z foldable models are powered by Alphabet's Gemini artificial intelligence.

But this launch takes place as analysts predict Apple will introduce its own foldable phone later this year. This device is expected to feature a screen similar in dimensions to an iPad mini. Samsung, a company that pioneered the foldable smartphone market, now faces the task of maintaining its established position. Francisco Jeronimo, Vice President at researcher IDC, stated that this launch represents one of Samsung's most significant foldable introductions strategically. He added that the organisation must defend the market category it created.

IDC forecasts suggest that Samsung will likely expand its global smartphone market share in the coming year, 2026. This projection stands despite an anticipated 14 per cent contraction of the overall smartphone market, which is primarily attributed to a shortage of memory chips. However, IDC also expects that shipments of foldable phones will experience a 20 per cent increase. The overall market decline and specific segment growth present a contrasting outlook for the industry.

And some analysts anticipate that Samsung's mobile division could record its inaugural quarterly loss in the second quarter. This projected loss is a direct result of rising chip prices, which compress profit margins for the mobile unit. Conversely, these same surging chip prices are simultaneously elevating profit margins within Samsung's semiconductor business to record levels. This presents a split financial performance across the company's different divisions.

Data compiled by Omdia indicates that memory and storage components constitute a substantial portion of material expenses for smartphone production. These components account for over 60 per cent of costs in budget smartphones and exceed 30 per cent in premium models. Sheng Win Chow, a senior analyst at Omdia, noted that memory represents a smaller proportion of the bill of materials for devices priced above USD 1,500 compared to mid-range phones.

So, he explained, this provides greater scope to absorb higher chip prices within the top-end segment of the market. Mr Chow further questioned the justification for these price points, stating that an enlarged screen alone is no longer a sufficient differentiator in the competitive landscape. The Galaxy Fold8 and Fold8 Ultra models incorporate the latest processor from Qualcomm, while the Flip8 utilises either a Qualcomm chip or Samsung's Exynos chip, dependent on the specific market of sale.

• Samsung unveiled three new Galaxy Z foldable phones in London.

• The new Galaxy Z Fold8 is priced at USD 1,899; updated Fold8 Ultra and Flip8 saw price increases to USD 2,099 and USD 1,199 respectively.

• Apple is expected to launch a competing foldable phone this year, posing a challenge to Samsung's market position.

• Despite a predicted 14 per cent contraction in the overall smartphone market for 2026, foldable phone shipments are forecast to grow by 20 per cent.

• Rising memory chip prices are affecting Samsung's mobile division margins but are increasing profits for its semiconductor business.

Source: Reuters