November 26, 2024

• 

Galaxy Z Flip 3 (Samsung)

Samsung Electronics unveiled its “Tiger” strategy at CES 2022 to beat Apple in the flagship smartphone market, but experts say that the South Korean tech giant should first come up with “killer content” for its foldable smartphones for that strategy to work.

During the world’s largest tech show held in Las Vegas last week, The Korea Herald exclusively reported on the South Korean tech giant’s “Tiger” strategy, which revolves around narrowing its gap with Apple by expanding the market share of the foldable Galaxy Z series in the North American market.

While the mission is intended for Samsung to bolster its presence in the high-end flagship market, it first needs to develop content for foldable smartphones, experts say.

“Samsung has yet to provide killer content that makes use of foldable features. Customers are simply drawn by the foldable design, but there’s not much change in terms of user experience. This is limiting Samsung’s penetration rate in the flagship smartphone market,” said Kim Gwang-soo, an analyst at eBest Investment and Securities.

However, as foldable panels become more affordable, foldable laptops and tablets are coming down the pike, and this could establish a foldable ecosystem to challenge Apple’s, Kim added.

“A foldable display used to cost $100, but the price has come down to $70 to $80. At CES 2022, some companies showcased foldable laptops and tablets. If content compatible between foldable devices is introduced, this could create a foldable ecosystem and motivate consumers to switch to the Galaxy Z series from the iPhone.”

Even without killer content, Samsung’s foldable strategy is working. In the fourth quarter of 2020, Apple commanded 65 percent of the US smartphone market whereas Samsung controlled just 16 percent. Thanks to the successful launch of the foldable series, the gap has significantly narrowed. In the third quarter of 2021, Samsung’s market share jumped to 34 percent while that of Apple shrank to 47 percent, according to Counterpoint Research.

“Samsung is pushing its foldable lineup because it knows it can’t compete against Apple with the same bar-type smartphones. Samsung’s strategy is to introduce products Apple doesn’t, just like it rolled out the Galaxy S Edge series in the past,” analyst Kim said.

According to Samsung Electronics, sales of the Galaxy Z series quadrupled in 2021 compared to a year prior, meaning that more than 10 million units were sold. This would provide Samsung breathing room in the low- and midrange smartphone market, where Chinese competitors are increasingly offering better and cheaper options.

For instance, Chinese budget smartphones such as the Xiaomi Poco F3 and Realme GT, which cost around $400, are equipped with high-performance Snapdragon 870 and Snapdragon 888 chips, respectively, whereas the Samsung A52 and A72, though they cost about the same, are mounted with less advanced Snapdragon 720G chips.

Instead of maintaining global market share by selling the Galaxy A series in low-end markets inundated by Chinese alternatives, targeting highly profitable flagship markets such as the US would be more beneficial for Samsung in the long run, sources say.

By Kim Byung-wook (kbw@heraldcorp.com)