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Can Folding Phones Help Samsung Emulate Apple?



People are hanging on their phones anymore. It is a major headache for

Samsung Electronics

the world's largest smartphone manufacturer in volume.

The global smartphone market is on track for its second annual decline in a number of shipments dropped nearly 4% in the first three quarters of this year, according to International Data Corp. Manufacturers have launched Many new models, with faster processors, sharper monitors and better cameras. Nevertheless, such improvements have not convinced enough consumers to dike their old phones.

Sector leader Apple has managed to increase revenue despite stagnant sales over the last few years by raising prices. Other smartphone manufacturers who are missing the fenced garden of Apple's IOS operating system have found it harder to pull off. Consumers find it easier to trade brands when they almost all use Google's Android operating system.

  Smartphone makers must find ways to convince consumers to pay for new models. On the picture, Samsung Galaxy Note 9.

Smartphone makers must find ways to convince consumers to pay for new models. On the picture, Samsung Galaxy Note 9.


Photo:

Richard Drew / Associated Press

This is exactly the difficulty that Samsung finds in itself. The Korean technology giant sent 72 million smartphones last year, 13% fewer than a year ago, according to Counterpoint Research. The largest Chinese telephone exchanges, Huawei, Xiaomi, Oppo and Vivo, have offloaded much of the market share. They sent a combined 152 million smartphones last year, 18% more than last year and twice as many as Samsung.

By selling smartphones with premium features at affordable prices, these Chinese brands have grown at breakneck speeds in emerging markets in places like India and Indonesia, where Samsung has traditionally been the market leader. Even though they spend less money by phone than Samsung, who used to dominate the Android Pool Profit Pool, their increasing sales volume means the four biggest Chinese brands combined to earn more money from selling phones than the Korean giant.

The question about the smartphone Other decision makers than Apple are: What will consumers, especially those in developed markets, pay for new models? Samsung believes the answer lies in phones with screens that can be folded up as books. The complaint is clear: people want larger screens, but also want the phones to fit into their pockets. For Samsung, it is an advantage if folding phones catch up. It is also the largest manufacturer of the type of display used in such smartphones, called organic LEDs. The problem: these phones will be costly.

IHS Markit

estimates that they can cost around $ 2000 each.

Samsung has been in the last two years concerned with strong demand for memory cards, which accounted for about three quarters of operating profit last year. But as the chip boom fails, investors can begin to be more aware of their weak smartphone sales again.

Write to Jacky Wong at JACKY.WONG@wsj.com


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