Samsung aims for sales of foldable phones to overtake those of its now dead but hugely popular Note devices

Samsung hopes to make its foldable telephones mainstream, saying on Thursday that it goals for gross sales of the units to overhaul its fashionable Observe sequence of handsets.

The South Korean electronics big is seeking to push gross sales of its foldable handsets to spice up profitability in its cellular division, which has been hit by rising materials prices and falling shopper demand.

Samsung first launched the Observe smartphone mannequin in 2011. It has discovered success through the years because of its bigger display screen dimension at a time when rivals had smaller screens.

However as smartphones continued to get greater, together with Samsung’s flagship S-series units, the Observe was finally discontinued. As a substitute, the corporate’s Galaxy S Extremely mannequin crammed the void. The Observe 20, launched in 2020, was the final telephone within the Samsung sequence.

Samsung’s first foldable telephone, the Galaxy Fold, was launched in 2019 after some technical points. Since then, the corporate has launched various different fashions.

However foldable telephones are nonetheless a distinct segment within the general smartphone market. Samsung hopes to show them into “mainstream,” in line with its earnings assertion launched Thursday, in a bid to spice up profitability in its smartphone division.

“Within the second half of the yr, we are going to proceed to keep up the gross sales momentum of our S sequence and in addition use the brand new foldable sequence that might be launched to be able to present a gross sales quantity larger than the gross sales volumes we used to report with the sequence. Observe,” Sung Koo Kim, vp of the corporate’s cellular expertise division, mentioned in a convention name Thursday.

It is unclear what time-frame Samsung is referring to for foldables to renew Observe gross sales, provided that the latter machine is now discontinued. Samsung was unable to make clear when contacted by CNBC.

For reference, Samsung shipped 190 million Observe units over the telephone’s lifetime, in line with IDC. Up to now, Samsung has shipped over 10 million foldable telephones.

Samsung has shipped round 12 million Observe 20 telephones, the final within the sequence, and round 14 million Observe 10 units. This compares to eight million Galaxy Z Flip 3 and Galaxy Z Fold 3 units, the newest foldable telephones Samsung.

The corporate is gearing as much as launch new foldable units subsequent month.

“It is smart that Samsung is putting its bets on foldables: it is a high-end, high-margin product that drives up common promoting costs and units Samsung aside from the competitors,” mentioned IDC analyst Bryan Ma, at CNBC.

“Whereas the Observe line nonetheless has a devoted fan base, it is also a decade outdated now, so placing the corporate’s ambitions on foldables helps the corporate keep forward of the curve.”

Certainly, the profitability of its smartphone division is Samsung’s predominant goal. Within the second quarter, income within the cellular enterprise fell quarter over quarter because of rising prices and “unfavorable forex results”, Samsung mentioned. Nevertheless, income grew year-over-year because of elevated gross sales of high-end fashions such because the S22 smartphone and the Tab S8 sequence of tablets.

Samsung’s Kim expects the smartphone market to carry regular or develop barely within the second half. Foldable telephones might be a key a part of Samsung’s drive to extend profitability.

The corporate mentioned it should “ship sturdy profitability by concentrating on gross sales of foldables that outperform the Galaxy Observe sequence and all-consumer foldables by delivering a differentiated shopper expertise via international partnerships.”