[Comprehensive] Samsung Foldable with Lowered Price... Expanding Market Amid Challenge from China

[Asia Economy, Jo Seul-gi-na] The market for 'foldable' smartphones is expanding. Chinese manufacturers such as Xiaomi and Huawei, known for their cost-effectiveness, have thrown down the gauntlet in the foldable phone market, which has been virtually dominated by Samsung Electronics. Samsung Electronics, which declared the 'popularization of foldable phones' this year, has also begun a 'price reduction' strategy by lowering the launch price of the Galaxy Z Fold2 by more than 500,000 KRW. This move is interpreted as an effort to accelerate the popularization period by lowering the price barrier while responding to the overt price war from Chinese manufacturers.

◆ Galaxy Z Fold2 Launch Price Reduced by About 500,000 KRW

According to related industries on the 1st, Samsung Electronics and the three major mobile carriers lowered the launch price of the Galaxy Z Fold2, released in September last year, from the original 2,398,000 KRW to 1,892,000 KRW on this day. This is a price reduction of more than 20% within half a year after its release. This is the first time the launch price of the Galaxy Z Fold2 5G model has been reduced. When using LG Uplus's monthly plan in the 80,000 KRW range, which offers the largest official subsidy among the three carriers, the actual purchase price is lowered to around 970,000 KRW after applying the official subsidy (800,000 KRW) and additional subsidy (120,000 KRW).

This price reduction is seen as part of Samsung Electronics' efforts to popularize foldable phones. In February, the launch price of the Galaxy Z Flip 5G was lowered from 1,650,000 KRW to 1,349,700 KRW. Since the release of a new foldable phone is expected soon, this move aims to reduce the price of older models to clear inventory in advance. Foldable phones priced between 1.5 million and 2 million KRW have long been considered relatively expensive, acting as a barrier to entry.

It is also a strategic move to expand the user base ahead of the launch of new foldable products in the second half of the year. An industry insider said, "Before strengthening the foldable lineup in earnest, the strategy is to lower the price entry barrier to accelerate popularization," adding, "Since it has been confirmed that Samsung Electronics is unlikely to release a new Galaxy Note series in the second half of this year, more focus will be placed on foldable phones."

Samsung Electronics is reportedly aiming for an annual foldable shipment target of 10 million units internally. The strategy is to increase foldable shipments to a level similar to that of the Galaxy Note series.

◆ Will Samsung's Dominance Be Broken? Xiaomi and Others Challenge

On the 30th of last month, China's Xiaomi launched its first foldable phone, the 'Mi Mix Fold'. It has a similar appearance to Samsung Electronics' 'Galaxy Z Fold2', which was unveiled in September last year.
[Image source=Yonhap News]

Currently, Samsung Electronics holds more than 80% market share in the global foldable phone market, effectively dominating it. According to market research firm Counterpoint Research, the global foldable phone market is expected to grow threefold from 5.6 million units this year to 17.2 million units next year. In particular, market attention is focused on whether the dominance of Samsung Electronics will be broken as Chinese manufacturers such as Huawei, Xiaomi, and Oppo launch foldable phones at lower price points. These Chinese manufacturers are employing overt copycat strategies and lowering prices, which could take some market share away from Samsung Electronics.

Yesterday, Chinese Xiaomi launched its first foldable phone, the Mi Mix Fold, at 9,999 yuan (about 1.72 million KRW), intensifying the low-price offensive. The device's appearance closely resembles the Galaxy Z Fold2, and it even uses the name 'Fold.' Earlier, in February, Huawei's foldable phone Mate X2, released in the Chinese market, was also criticized for resembling the Galaxy Z Fold2. At that time, Huawei seemed aware of such criticism and openly compared the two products in public, claiming its product was superior.

For Samsung Electronics, it is expected to respond to the Chinese manufacturers' 'low price + copycat' offensive with a two-track strategy: lowering the price of existing products and advancing with the technology of newly released products. Jeff Pu, an analyst at GF Securities, said, "In a situation where all smartphones look similar, Samsung's focus on foldable phones is a wise move," adding, "Samsung Electronics still holds an advantage over all competitors."

Rendering image of the Galaxy Z (tentative name) with a double folding design, released by the tech media LetsGoDigital

The market expects Samsung Electronics to unveil successors to the Galaxy Z Flip and Z Fold as early as this summer, and later reveal a budget foldable phone in the 1 million KRW range, tentatively called the 'Galaxy Z Flip Lite.' A double-folding smartphone that folds the screen twice is also anticipated.

Meanwhile, Samsung Electronics is operating a 'Used Phone Additional Compensation Program' from today until May 31 to commemorate the second anniversary of the domestic launch of the first 5G smartphone. Customers who purchase the Galaxy S21 series or foldable phones Galaxy Z Fold2 and Galaxy Z Flip 5G and trade in used phones released at the time of 5G commercialization will receive up to an additional 150,000 KRW compensation on top of the used phone market price.