Rumours Samsung will launch new smartphone with foldable screen

 

HSBC analysts are predicting that Samsung, the South Korean electronics manufacturer, is going to launch a smartphone with a foldable screen in the second half of 2016 as the company tries harder to regain its market share, news reports have highlighted this week. Being developed under the codename “Project Valley”, the fold would present users with a far bigger screen, which could prove useful for apps and consuming media without drastically increasing the size of the device. Samsung was one of the first to introduce larger screens, before its rival Apple came along with the larger-sized iPhone 6, which saw them attain their most profitable quarter of any company ever, whilst Samsung’s profits and sales plummeted. It is reportedly hoped that the introduction of Samsung’s new foldable screen smartphone will go some way towards redressing the balance of interests in this lucrative market.

 

Samsung might be preparing to launch a smartphone that is radically different from anything else on the market.

Analysts at HSBC are predicting that the South Korean electronics manufacturer is going to launch a smartphone with a foldable screen in the second half of 2016.

Samsung has been looking into foldable-screen technology for years, and there are rumours that it is developing a smartphone under the codename Project Valley. (Samsung has never acknowledged this.) The fold would let users have a far bigger screen — useful for apps and consuming media — without drastically increasing the size of the device. But few expect it to make its way to market any time soon.

However, a new report on foldable screen technology from the bank HSBC argues that the tech "will be here sooner than we think."

"The foldable smartphone is upon us"

HSBC analysts argue that Samsung is likely to be one of the first to utilise the technology commercially, and we should expect to see a launch this year. (This won't be in its flagship Galaxy S line, by the way: That's due to launch in Q1 and rumours make no mention of a folding screen.)

Here's the analysts' rationale — emphasis ours:

We think Samsung will likely introduce foldable OLED smartphones as early as 2H16, versus market expectations of 2017, as the company tries harder to regain market share. In our view, foldable OLED smartphones could transform Samsung’s smartphone business, with the potential to become a ‘killer’ feature in the premium smartphone space given that (1) a foldable OLED model would provide it with a high degree of product differentiation; (2) it gives users the best of both world’s – namely, a larger screen size in a smaller form factor; and (3) it could enable the company to capture market share in both the smartphone and tablet markets with a single product. The coming roll-out of foldable OLED smartphones also bodes well for growth across the entire OLED panel supply chain: from the panel makers to equipment makers to materials suppliers.

In short: Samsung is struggling to regain market share, and a foldable screen would give it a truly unique selling point, setting it apart from every other product on the market.

And, as an added bonus, the larger screen sizes the fold would create would let Samsung gobble up part of the tablet market too.

It makes sense.

It's worth pointing out that HSBC doesn't seem to have an inside source here — or at least, not one it's acknowledging. It's just making a prediction.

But strategically, it does make sense.

Samsung smartphones have succeeded best when they're unique — when they offer the consumer something that no-one else can. The South Korean company was one of the first to introduce larger screens, and as such used to dominate high-end smartphone sales.

But then Apple came along with the larger-sized iPhone 6 — which handed Apple its best ever sales, as well as the most profitable quarter of any company ever. Meanwhile, Samsung profits, and sales, plummeted. (Samsung's sales have also been hurt by the rise of low-cost Asian smartphone vendors like Xiaomi and Huawei.)

Samsung's year-on-year sales figures for Q2 2014 and 2015. Gartner

In 2015, Samsung made a similar mistake again with the S6, its flagship smartphone. It built two versions of the device — the S6, and the S6 Edge, which is more expensive, and has a curved screen.

The Galaxy S6 edge+ and Galaxy Note5. Ilya S. Savenok/Getty Images for Samsung

According to a report in The Wall Street Journal in July 2015, Samsung assumed demand for the devices would be around four to one in favour of the regular S6. But the Edge has turned out to be much more popular, and demand is closer to one to one. The company was left scrambling, with excess inventory of S6 units and not nearly enough of the more expensive S6 Edge units to satisfy demand.

It sounds like a good problem to have — your phone is too popular!

But it's also totally avoidable, and damaged Samsung's potential sales.

A truly unique selling point

This is Samsung's chance to be unique. Aroid via Flickr

One of the rumoured features for the S7 — Samsung's next big phone — is a pressure-sensitive screen. It is rumoured that the smartphone will be able to tell how hard you are pressing on the screen and react accordingly — a feature very similar to Apple's "Force Touch," which it introduced to the iPhone 6s back in September 2015.

Samsung has been accused of copying Apple like this for years, and has even been targeted by lawsuits alleging that it has infringed upon the Cupertino company's patents.

A foldable smartphone, on the other hand, would be truly unique — and ideally positioned to grab swathes of the high-end smartphone market.