Samsung’s Bold Strategy to Expand Foldable Phones and Democratize AI

Samsung’s mobile chief, TM Roh, recently made waves by revealing that the company is willing to absorb losses on its latest foldable smartphones in order to expand their reach and push AI technology to the masses. This bold statement comes at a time when the foldable phone market has yet to fully take off, despite Samsung’s earlier expectations. When Samsung first launched the Galaxy Fold six years ago, it seemed poised to revolutionize the industry with its groundbreaking form factor. However, the dream of foldables dominating the smartphone market hasn’t exactly materialized.

Instead, the cost of manufacturing these devices has skyrocketed, and consumer adoption has been slower than anticipated.

Despite these challenges, Roh isn’t worried about the sluggish sales of foldable smartphones. In fact, he seems quite comfortable with the idea of losing money on these devices in the short term if it helps achieve his long-term goal of making foldables and AI more accessible to a wider audience. “Pricing is always a key consideration with new product launches,” Roh explained. “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.” By doing so, Samsung hopes to establish itself as a leader in the foldable phone market, even if it means not turning a profit right away.

Interestingly, analysts had expected a significant price hike for Samsung’s latest foldable models, the Galaxy Z Fold 7 and Z Flip 7. However, Samsung has only implemented a modest, single-digit price increase. This strategy was apparently intentional, with sources indicating that Samsung wanted to keep prices competitive despite the increased costs of using advanced processors like Qualcomm’s Snapdragon 8 Elite and Samsung’s own Exynos 2500 chipset.

One key factor influencing this decision may be the decline in sales of the Galaxy Z Flip 6, which saw a 21 percent drop in shipments compared to the previous generation. This slowdown could be partly attributed to the competitive foldable market, with Chinese giant Huawei taking the lead in China with its Mate XT, the world’s first commercial tri-fold phone. Huawei’s success, despite facing significant export restrictions from the U.S., may have prompted Samsung to adjust its strategy to maintain a foothold in the crucial Chinese market, which is the largest smartphone market globally.

Looking ahead, Samsung is reportedly working on its own tri-fold phone, rumored to be called the Galaxy G Fold. With limited production slated for September, this device is expected to be launched as a test to gauge consumer interest. If successful, it could mark a new chapter in the evolution of foldable smartphones.