[NEWS ANALYSIS] Is it time for Samsung’s foldable phone?

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[NEWS ANALYSIS] Is it time for Samsung’s foldable phone?


A video that Samsung Electronics unveiled at the Consumer Electronics Show in Las Vegas in 2013 shows a device that is close to what the first flexible smartphone from the top producer is expected to look like when it launches early next year. [SCREEN CAPTURE]

Samsung Electronics has recently completed developing a foldable smartphone and is poised to launch sales of the phone with an entirely new form factor early next year, according to an insider familiar with the developing process.

“We have only recently succeeded in creating an unbreakable foldable phone after numerous rounds of experimentation,” said the source on the condition of anonymity last week.

At first glance the device will look like any other Samsung phone with an organic light-emitting diode (OLED) display of a similar size to other Galaxy phones. Open up the phone like a book, however, and an OLED screen inside will unfold to become a tablet with a 7-inch or so display, said the source, confirming the device’s much-teased hardware specifications. The extra display will show messages and other notifications and one flap folded out could become a keyboard.

The latest information about the device, commonly known as the Galaxy F, falls in line with what Koh Dong-jin, CEO of Samsung’s IT and mobile communications division, told CNBC at the IFA Berlin tech fair earlier this month. Koh was quoted as saying that the company has “nearly concluded” the development of a foldable phone, although the development process is “complicated.” The CEO gave no further specifics.

CNBC also reported that Koh hinted that more details of the device could be unveiled at the Samsung Developer Conference in November in San Francisco, but a Samsung spokesman last week tried to mitigate expectations.

“Nothing that Koh will discuss at the developer conference has been confirmed,” the spokesman said. “He may or may not mention the flexible smartphone.”

Another Samsung insider said that there is a high chance Samsung will not entirely take the wraps off the Galaxy F and, instead, offer a sneak peek at its user interface.

The two most likely venues at which the device could be debuted are the Consumer Electronics Show (CES) in Las Vegas, scheduled for early January, or the Mobile World Congress in Barcelona in late February.


Beating the competition

Although it has been only three weeks since Samsung began shipping the 6.4-inch Galaxy Note9, the long-awaited foldable phone has already stolen its thunder. Both consumers and the media are paying close attention to even the slightest scrap of information from Samsung executives, and rumors and leaks are more abundant than ever.

Leading global smartphone players - Samsung, Huawei and Apple - have long believed that foldable phones could be the technological breakthrough that revitalizes stagnant smartphone sales. Global smartphone shipments are projected to grow by a marginal 1.4 percent on year to 1.49 billion units this year, according to Strategy Analytics.

Consumers have grown increasingly reluctant to upgrade to next phones as devices boast increasingly similarly high-end functionality and design.

“Ever since full screens became the norm for smartphones, designs have been unified and brand identity among different producers has blurred,” said Ko Eui-young, an analyst at Hi Investment and Securities in a report.

Huawei, which recently outpaced Apple to become the world’s second-largest smartphone maker, is another reason that Samsung is feeling the pressure to unleash a foldable model. The Chinese electronics giant is reportedly looking to launch its own foldable smartphone by the end of 2018.

Huawei CEO Richard Yu told German newspaper Die Welt on Sept. 9 that his company aims to change people’s computer habits by making smartphone screens bigger using a “folded-out” display, with a device to be launched within a year.

He also made it clear that he wanted Huawei to be the first to roll out a foldable smartphone.

“Basically, the smartphone market share is not that important to us,” Yu said. “More important to me is that we are the first in user experience and innovation. In the end, this can also lead to market share gains.”

Analysts suspect that Huawei’s bid to be first in the door has spurred Samsung on.

“The increased competition from the likes of Huawei was the motivation for Samsung to come out with a flexible model sooner rather than later,” said Wayne Lam, a principal analyst at market researcher IHS Markit.

Apple is also said to be preparing to join Samsung and Huawei in making a foldable phone. Its target release year is speculated to be 2020, according to Wamsi Mohan, an analyst at Bank of America Merrill Lynch.

Chinese producer ZTE’s Axon M late last year came up with what it claims is a real-life foldable phone, but the device actually has two full-size screens connected with a hinge, making it more like a high-tech version of a traditional flip phone.

Consumers’ growing appetite for a bigger smartphone screen to watch videos and play games suggests a serious demand for a new form factor that doubles the screen real estate.

The Galaxy F will have a 7.3-inch screen when fully unfolded, which will reduce to 4.6 inches when folded, rumors say. The display will sport a curvature radius of less than 1R, meaning the panel lies almost completely on top of the other when the device is folded at a 180-degree angle.

A 1R curvature radius indicates that display can bend around a hypothetical cylinder of one millimeter in diameter. The smaller the curvature radius value is, the more completely a device can curve, and the key to the technology lies in controlling the optical properties of the materials as it does so, according to display researchers.

Ever since Steve Jobs unveiled the first iPhone with a 3.5-inch display in 2007, devices have constantly gotten bigger. The peak is the new iPhone XS Max, unveiled on Sept. 12 with a 6.5-inch screen, while Samsung’s biggest offering, the Note9, has a 6.4-inch screen. Foldable phones could seriously eat into the tablet market if they become mainstream, just as phablets attempted to do.

“I believe the most appropriate application of flexible displays is to create a new product category that straddles mobility and computing - basically a large phone that unfolds to reveal a large display that can be used in a ‘productivity’ mode,” said Lam of IHS Markit.

Waiting for the right time

It has been seven years since Samsung first began testing the water for phones with flexible displays.

In January 2011, the company unveiled a foldable Amoled smartphone prototype that wouldn’t break after 100,000 folding-unfolding cycles at the Consumer Electronics Show. The brightness at the point where the screen folded fell by a mere 6 percent, a difference that the human eye could barely see.

Two years later, Samsung showed off its Youm flexible-display technology at the same tech fair. In a demonstration of different concepts, the company introduced a phone-like device with a screen that could wrap around the side and a video of another device that could be rolled up. The company also played a video teaser that featured a flexible smartphone that looks nearly identical to the rumored Galaxy F.

Even back in 2013, it was already accepted that rollable and foldable displays would maximize the portability of smartphones in the near future, leading to innovations in product design.

Anticipation for smartphones with revolutionary form factors was heightened as Samsung and its display affiliate registered patents for over 100 different flexible displays and phones with such parts with the Korean Intellectual Property Office and the U.S. Patent and Trademark Office.

In 2016, it appeared almost certain that Samsung would take the wraps off its first “folding” phones at the Mobile World Congress in February 2017. Bloomberg reported that one of the two devices could fold up like a compact mirror and the other, thought to have a 5-inch display, could unroll to have a display as big as 8 inches. Rumors said the phones carry the code name Project Valley, which Samsung reportedly recently switched to “Winner.”

Samsung dismissed the report as a mere rumor and the long-awaited devices never appeared.

Earlier this year, Samsung’s smartphone chief Koh Dong-jin told reporters that foldable phones were still being reviewed.

“Once [foldable phones] are out in the market, I want to hear reviews that Samsung has done a great job,” he said at the CES. “We still have technological issues such as user experience to resolve. Personally, I want foldable phones to be out as soon as possible given their industrial impact.”

Game changer

The upcoming Samsung foldable phone is set to cost more than 2 million won ($1,781), according to the source at the company, citing the hefty cost of developing new parts that match the new form factor, such as a flexible display, chipset and battery as well as the user interface.

Kim Jang-yeol, head of research at Golden Bridge Investment, leaked an estimated price of up to 2 million won earlier this year after Samsung showed off a prototype in a closed-door meeting with clients at CES.

Charging more than 2 million won for a Galaxy device is unprecedented. The high price would have made it nearly 700,000 won more expensive than the currently priciest Galaxy Note9 with 512 gigabytes of storage at 1,353,000 won. The new iPhone XS Max, by far the most expensive model Apple has ever released, carries a price tag of as high as $1,449 for the same storage size.

Going premium to be able to slap higher price tags on devices is an option that both smartphone leaders have picked. The global share of premium smartphone shipments increased to 18 percent in the fourth quarter of last year, up from 8 percent in the same period a year earlier. Analysts attribute the trend to Apple’s release of the iPhone 8 and iPhone X in September last year.

“If you are selling fewer phones, you have no choice but to make them more expensive,” said Park Won-jae, an analyst at Mirae Asset Daewoo Securities. “A new foldable smartphone is a good excuse to allow Samsung to hike the price. Not only that, but if the company does have success with the model, it would upgrade its brand value further and show off its technological leadership.”

Samsung’s elevated brand value will justify price hikes in all smartphone segments, further contributing to the revenue.

“If the foldable phone turns out to be a success, Samsung’s mobile business will see its earnings improve sharply in 2020,” Park added.

Samsung won’t likely mass produce foldable phones in the beginning. They will probably come out in limited quantities, but Park says the volume does count that much, given the phone’s symbolic importance.

When Samsung rolled out the Galaxy Note Edge that boasted a thin, curved screen along its right edge in September 2014, the first of its kind in the world, the initial response wasn’t upbeat. But just three years later, curved screens became a common site across the high-end smartphone market.

Strategy Analytics came up with a conservative outlook on flexible phone sales. Back in April, the market researcher said in a report their shipments were expected at just 700,000 units for next year, but were projected to shoot up to 30.4 million in 2021 and 50.1 million by 2023.

The boost in sales would come at an important time for Samsung.

In unveiling the Galaxy Note9 three weeks earlier than its preceding model last year, Samsung set its sales goal at 12 million units, the same sales volume that its predecessor, the Note8, is estimated to have made.

Analysts project that the Note9 won’t sell more than 10 million units, however. Despite the better-than-expected performance on its home turf, a slowdown in global sales is haunting the smartphone giant.

Reviews of the Note9 criticized the device for failing to come up with any “notable” changes except for the more powerful stylus S Pen that supports low-power Bluetooth and inbuilt Dex support that could replace a laptop.

“Although Note9 flagship series has been launched earlier to boost the sales, the models are not expected to trigger much demand as the series’ overall specifications are not much different from the previous generation,” market researcher TrendForce said in an August report.

Consumers’ expectations for mega upgrades next year - foldable phones as well as 5G-enabled devices - are also deterring smartphone fans from snapping up the Note9. The first phones with next-generation 5G connection will arrive in the second quarter of 2019, said Qualcomm President Cristiano Amon at a Samsung unpacking event for Note9 in August.

Carriers around the world are scrambling to launch their 5G services next year. Demand for 5G phones will be slow in the first year, but shipments are expected to grow 255 percent by 2021 to hit 110 million units, according to Strategy Analytics in August.

Challenges to be addressed

The key to the success of the first Galaxy lies in how well it can withstand the rigors of being constantly folded and flexed. The device needs to be able to tolerate more than 43,000 folds a year, assuming that a user opens and closes their phone five times an hour.

The Nikkei Asia Review reported in July that a durability test by Samsung showed that the phone could be folded 20,000 times, meaning a user can only open their phone once per hour, given the common smartphone life cycle of two years.

Portability also poses a challenge. Foldable phone designers will have to find a way to avoid the devices being double the thickness of existing smartphones. Preventing the device from being noticeably heavier than a smartphone is also a considerably challenge.

“The purported Galaxy F has to be compact when folded and as large as a tablet when unfolded,” said Lam of IHS Markit.

A Note9 is just 8.8-millimeters thick, meaning a folding phone using the same technology would be 17.6-millimeters thick, considerably thicker than both the original Samsung Galaxy S and the original iPhone. However, rumors say the folded product won’t be thicker than 7.5 millimeters, the thickness of the iPhone 8 Plus.

It also remains to be seen how the long-awaited phone will tackle issues surrounding dust collecting in the folds, the safety of the battery considering the new form factor, memory capacity and reasonable pricing to attract a sufficient number of consumers to the bold new design.

BY SEO JI-EUN [seo.jieun@joongang.co.kr]
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