Galaxy Z Flip's Unexpected Strong Performance... S20's Final Sprint

Galaxy Z Flip Daily Sales 3-5 Times Higher Than Previous Model
Price Cut and Samsung's Own Discount Promotions
Galaxy S20 Also Recovering with Increased Subsidies

On the 11th (local time), Samsung Electronics held the Galaxy Unpacked 2020 event at the Palace of Fine Arts in San Francisco, USA, unveiling its strategic smartphones, the 'Galaxy S20 series' and the second foldable phone, the 'Galaxy Z Flip.' On the 12th, citizens are experiencing the related products at the KT Plaza Gwanghwamun branch in Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporter Han Jinju] Samsung Electronics' Galaxy Z Flip is performing well. Since its release in February, it has continued to deliver surprising results exceeding targets. The Galaxy S20, which was hit hard by the novel coronavirus disease (COVID-19), is aiming for a last-minute turnaround ahead of the August 5 unpacked event. If the Galaxy Note20 is released at this unpacked event, Samsung Electronics' main product in the second half of the year is likely to shift to the Note20. The Galaxy S20 needs to recover sales volume beforehand by increasing subsidies, among other measures.

Galaxy Z Flip 'Surprising Performance'

According to industry sources on the 20th, the daily domestic sales volume of the Galaxy Z Flip is around 1,000 units, which is 3 to 5 times that of its predecessor, the Galaxy Fold. The Galaxy Z Flip is the only flagship product released in the first half of this year to achieve its initial sales target. According to IT specialized media SamMobile and others, approximately 140,000 units of the Galaxy Z Flip were sold in February and about 230,000 units in March. In Korea, sales exceeded 100,000 units as of April and are estimated to be approaching 200,000 units. The Galaxy Z Flip attracted such hot interest immediately after its February release that it experienced a shortage of supply for a while. An industry official analyzed, "Although the smartphone market shrank due to the impact of COVID-19, the Galaxy Z Flip was not affected at all," adding, "This is the result of efforts in marketing such as various discount promotions."

Mobile carriers lowered the Galaxy Z Flip's retail price from 1.65 million won to 1.496 million won in early June, while the official subsidies, which were between 60,000 and 210,000 won immediately after release, increased to a maximum of 450,000 won after mid-June. With additional subsidies, it became possible to purchase the phone for under 1 million won. Samsung Electronics is running a promotional policy to sell the Galaxy Z Flip at a discounted price of 1,199,000 won at Digital Plaza until the 31st. The Galaxy Z Flip, initially released at 1.65 million won, has become even cheaper than the Galaxy S20 (1.24 million won).

There is also an analysis that the so-called 'phone decoration,' where users customize the Galaxy Z Flip design with various stickers to their liking, was effective. Among Galaxy Z Flip users, a trend of sharing various phone decoration photos on social networking services (SNS) has even emerged as a form of play. Samsung Electronics is also placing expectations on the Galaxy Z Flip 5G model to be unveiled at the August unpacked event. Although the exterior design is the same, this model features improved CPU processing speed.

Galaxy S20 Sales Recovering

Although sales of the flagship Galaxy S20 were sluggish compared to its predecessor, the smartphone market is showing a clear recovery trend, and a rebound is expected in the second half of the year. The Galaxy S20 Plus BTS Edition, which had a sold-out streak from pre-orders, is also being released in Japan, the United States, Europe, and Southeast Asia to recover performance.

Galaxy S20 sales reached only 60 to 80% of the previous model's level, but the demand was also significantly dispersed due to the Galaxy Z Flip and others. In the first quarter, Samsung Electronics' average smartphone selling price was $292, an 8.5% increase compared to the same period last year, reaching the highest level in six years. Although the official subsidies from carriers were up to 240,000 won immediately after the Galaxy S20 release, from May, the official subsidies rose to about 500,000 won, roughly doubling, and sales volume is also recovering.

The IM division's operating profit in the first and second quarters, directly affected by COVID-19, was better than expected. The second quarter IM division operating profit, to be announced at the end of this month, is expected to reach the high 1 trillion won range. The securities industry forecasts smartphone sales in the second quarter to be around 55 million units.