Yesterday Samsung (005930.KS) announced its latest Galaxy flagship smartphone and tablet lines, the S22 (smartphones) and the Tab S (tablets).  As these items were leaked to the point where there was little that was not known about them, it seems a waste of time to spend much time on same, so we show only the differences between the new models (S22 series) and the old models (S21 series) for comparison.  We see the main difference between last year’s models and this year’s models as the ability to store the S-Pen in the S22 Ultra, which was not possible with last year’s model, along with the details below, most of which are minor adjustments or silicon upgrades   Prices remain the same.  Categories that are blank indicate no change for that model y/y and categories that are missing also indicates no change.

Earlier this week we mentioned the BOE (200725.CH) LED display that was the basis for much of the Winter Olympics Opening Ceremony, considered the largest in the world (uncertified as of yet), although Guinness certifies the display at Resorts World in Las Vegas as the largest, but there is contention in the world of massive LED displays, as Samsung Electronics (005930.KS) claims that its “Infinity Screen” at SoFi Stadium is “the largest videoboard ever created in sports” and is the only dual-sided, center-hung videoboard.  The Samsung display, which hangs 122 feet above the field, is 70,000 ft2, which is smaller than the abovementioned displays, but is certainly unique in shape and is 1.2 times longer and 1.5 times wider than the field itself and weighs 2.2m pounds. 
The oval display has 4K resolution and HDR10+, with pixels spaced 8mm (0.31 in.) apart, and works with the 2,600 other large format displays and ribbon boards positioned around the stadium, but what good is video without sound, so Samsung has placed 260 “JBL by Harman” speakers in the display frame, which it claims is equal to 1,500 home theater systems.  Of course, JBL (pvt) is owned by Harman (pvt) who was purchased by Samsung in 2017.
All in, there seems to be no end to the expansion of LED video walls across the globe and the competition for ‘largest’ will continue as LED modules become less expensive and more sophisticated, along with the control systems and software needed to bring them to life.  Years from now these displays will likely look a bit simple as LED technology moves to smaller die and micro-LEDs, but it sure looks different than 120 years ago (see below) when the best you had was lots of light bulbs and a guy whose job it was to replace the ones that burned out each day.
https://news.samsung.com/us/game-on-how-infinity-screen-samsung-will-bring-sundays-big-game-life/

Last month we noted that Samsung Electronics (005930.KS) has established a new and updated presence in the Metaverse during CES called “My House” where potential customers could create (sort of) their own digital home for “millennials and zoomers”, complete with avatars they designed, and stocked with a wide variety of Samsung products that they can interact with.  This new interactive site, which is an upgrade to the “Galaxy House Experience” that Samsung introduced last year, where visitors could interact with some of the company’s smartphones and connect with members of the K-Pop group BTS, gives users the ability to customize their ‘house’ through the same Zepeto (035420.KS) platform.  Samsung has indicated that the new iteration has reached a cumulative total of over 4m visitors since its release on January 5.

The “My House” experience starts with the ‘front yard’ where visitors can speak to other visitors or walk to other houses that have been customized (colors, finishes, etc.), albeit with the same layout, where you can walk through the front door and enter the living room, kitchen, laundry room, office, bedroom, or bathroom.  Each room has its requisite Samsung appliances that you can pick up, turn on, or see or feel the output, or even play games on the living room TV or office monitor, but surprisingly there is little information about the products, and most offer just short loops of images on the screens or allow your avatar to touch random keys on the game keyboard while the game loops on the TV.  There are choices that can be made, such as selecting a particular type of Samsung TV to watch, but it is a far cry from visiting a real Samsung booth at CES (pre-COVID) where product information was first and foremost and booth ‘helpers’ were willing to show you how anything worked and point you toward senior staff if you looked like you had corporate buying power.
As the Zepeto platform is available for smartphones, it is visualized in 2D[1] and is essentially a relatively simple walk-through with a few interactive points, much like a simple game or social site, so calling this the Metaverse is like calling a house cat a ‘wild carnivore’ because it eats meat based processed canned cat food.  So we place little credence in this Samsung attempt to step into the bold new world of the Metaverse.  If one looks at the evolution of selling on the internet, one of the most innovative advertising tools was the ability to spin an image in any direction to see parts of the item that were not visible in the static image, and most product channels still do not have that capability, with most using multiple clickable image views, so a cartoonish avatar that can hold a descriptionless vacuum cleaner while listening to a radio does little other than act as a curiosity that Samsung marketing feels obligated to present.  If Samsun were willing to offer up the real data on site visitors, such as age, lead generation, sale completions, and return visits, it might offer some insight into the characteristics needed to actually sell items in the Metaverse, as opposed to just promoting the idea that the company is a hip and happening Metaverse participant.


[1] We thank The Verge for providing My House screen shots.

​A survey by SellCell.com has indicated that 20% of Android users intend to upgrade their phones to the Samsung Galaxy S22 line to be announced next week.  The survey, which had almost 11,000 Android owners participating, pointed to the Galaxy S22 Ultra, the company’s closest model to the now defunct Galaxy Note line, as their choice (44.4% of those making a change), while the standard S22 is the 2nd most popular at 30.1%, followed by the S22+ at 25.5%.  Over the last few weeks the Galaxy S21 Ultra, last year’s model, has become the most traded-in smartphone in the Android world, accounting for 22.3% of all Android smartphone trade-ins, which some conclude is a result of the popularity of the soon-to-be-available Galaxy S22 Ultra, but as the new phone is not yet available for pre-order we find it hard to correlate that data, especially as the Galaxy Z Flip and the Galaxy Z Fold are also on the top 10 most traded-in list, having only been released 5 months ago.
While 20% of Android users wishing to upgrade to a new model might seem like a relatively small number, the multiplier of Android users is ~2.8b globally, which would translate to 560m users willing to upgrade according to the survey, but as with most surveys, those answering the survey tend to have a pre-defined conclusion that draws them to the survey itself, rather than a man-on-the-street survey that randomly chooses participants, so we have to temper the overall survey results, but it does reflect a bit on a survey done last year that indicated that Android users were less likely to convert to an iPhone in 2021 than in 2020 as that trend continues into this year, or at least until the new Galaxy models are released.
The survey went a bit further, breaking down those who expect to upgrade by gender, with 30.4% of those expecting to upgrade being male while only 14.2% of women seem to be making that choice, with those intending to upgrade to a Samsung S22 model, 61.5% were men and 38.5% were women.  But the biggest segment of ‘upgraders’ came from the 25 to 34 year old segment, where 27.3% of respondents were expecting to upgrade, higher than both the 18-24 (21.0%) and the 36-44 (24.0%) segments, with the Galaxy S22 Ultra edging out the other models in all but the 18-24 year old group.
As we noted, we temper the results of such surveys a bit, but the seeming popularity of the Samsung Galaxy Ultra, likely the most expensive of the three flagship models, would lean us toward the popularity of the former Samsung Note line, which was equipped with the S-Pen, which we believe was its most popular feature.  While the S22 line is expected to have S-Pen support in at least one model, the S22 Ultra, there is the possibility that will also migrate to the S22+ or even the S22.  If so, that could change what is now a bias toward the top of the Galaxy S22 line, but for now the survey would indicate that Samsung’s S22 line will be well received by Android users.

​If you are one of those folks that ‘have to have the latest technology’, it must have been a difficult time when Samsung Electronics (055730.KS) released their first ‘consumer’ micro-LED TV in March of last year.  The massive 110” 4K TV was a scaled down version of the company’s “The Wall” a commercial product that was built from modules that could be configured into a screen that was 292” (diagonal), which is 11’ 5” high and 21’ 3” wide.  Last year’s 110” micro-LED TV was a bit pricey, offered at ~$155,000 initially, or ~$30/in2 but Samsung is in the price reduction mode for its micro-LED TV, and has not only cut the price to a mere $83,000 (reportedly) or $16.04/in2.  How might one resist such a bargain?  Well Samsung is now also offering (likely available in June or July) a 114” version for $100,000, or $18/in2 or for those smaller homes, an 89” version for a paltry $80,000 or $23.64/in2, although neither is quite as good a bargain as the 110” model on a value/in2 basis.
But the good folks at Samsung are not really trying to rip off consumers with such high prices as the cost of producing these sets is quite high, particularly the cost of producing the micro-LEDs that make up the light-emitting portion of the device.  To begin with there are 8,294,400 pixels for each 4K screen, which are made up of three (RGB) sub-pixels, for a total of 24,883,200 micro-LEDs per display, and as these chips are less than 100um each, even in such large TVs, they are each smaller than a human hair, which makes the requirements for their production quite complex, requiring a clean room and precise control over the LED growth process.  Even under these rigorous conditions there can be considerable variances in micro-LED chip performance, both from a brightness and a color standpoint, and measuring these characteristics on a wafer containing hundreds of thousands of micro-LED die.  Since the measurement of those characteristics is a developing science, not all ‘bad’ die are always identified, so when they are transferred to the substrate of the final display, some need to be replaced, a process that is even more difficult than the transfer process itself.
Given that as the micro-LED TV size decreases, such as in the 89” version, the micro-LEDs either need to be smaller or they need to be packed more closely together, both of which increase the difficulty and cost of producing these smaller sets, and this is likely why Samsung has temporarily abandon plans to release sets below 80” for the near-term, and given estimates that Samsung has sold only a few hundred of these sets makes it more of a science project than a real retail product.  That said, we are back to the consumer electronics ‘chicken and egg’ concept that keeps companies operating under the belief that if they can come up with a new technology, despite its high cost in the early days, consumers will find some value and will begin to justify the kind of process improvements and mass production that are necessary to bring down the cost.  But this is not a rapid process, which is evidenced by the January 2006 release of the BenQ/Siemens (2352.TT) S88, the first smartphone to use an AMOLED display as its main screen (2”), with OLED smartphones now 16 years later taking up over half of all smartphones produced.
So while we are certainly optimistic that over time micro-LEDs will improve in quality and cost, we are not expecting a competitive micro-LED TV product in the near future.  There have already been significant improvements in micro-LED process technology and there is certainly a path toward mass production, especially when used in conjunction with quantum dots, but right now such sets are a novelty that TV brands use to prove that they have the technology to lead the market, so be patient and remember, due to the magic of compounding, with an initial investment of $100 and putting away $10 per month, after 16 years you will have earned an extra $1.44 at today’s 0.06% average bank saving account interest rate, so start putting that money away now!

​Samsung (005930.KS) is having a Galaxy ‘Unpacked’ event of February 9 during which they are expected to release their new line of Galaxy tablets, which have been leaked ‘accidentally’ or otherwise to a number of locations.  What makes this tablet series different than previous models is the addition of an ‘expected’ 14.6” model that would further blur the lines between tablets and laptops.  While full specs have not been released officially price was posted for a short while on the Amazon (AMZN) site in France, which translated into $1,307 US for the Wi-Fi only model and $1,475 for the 5G model.  For reference the smaller (11”) Galaxy Tab S7 tab originally sold for $650 while the Galaxy S7+ (12.4”) originally sold for $849, so there is a fairly large price gap between the smaller versions, should they remain at the same price as last year’s models and the larger version this year, putting the new tablet model in the same price range as Samsung’s Galaxy Book Pro line, which has a 13.3” model and a 15.6” model selling for similar prices.  More to come next week…

​Equipment bake-offs are a dangerous business, as the cost of developing and producing demos and then a working model of large display production equipment can be quite expensive, especially when it comes to a demanding customer such as Samsung Electronics.  Way back in July of 2020 we noted that Samsung (005930.KS) had been evaluating the ink-jet printing tools developed by Kateeva (pvt) and SEMES (009150.KS), a Samsung owned company that had been a supplier of display equipment to its parent, and had chosen SEMES as the provider of the IJP tools that it would be using to print quantum dot material under its new QD/OLED process.  This was a disruptive choice for Kateeva, pushing the company to fall back on its IJP encapsulation product development and focusing on Chinese panel producers who were expanding their OLED panel production.
Little was said concerning why Samsung made the choice, especially given that our information suggested that Kateeva’s tool had produced better results, but other factors prevailed, and while much of SEMES’s traditional display business was for sale, the IJP portion seemed to be headed for Samsung’s new QD/OLED fab, even as Kateeva’s price offer was said to be lower than SEMES’s.   As the QD/OLED fab has been sampling product for a few months, the SEMES tools continue to operate however problems seem to have occurred and there have been suggestions that SEMES is blaming the Samsung Advanced Institute of Technology, the company’s R&D development organization that was said to have been part of the software development process for the equipment’s poor performance.
It seems that Samsung is now going to use Kateeva’s IJP tools for the QD deposition process, placing an order with HB Solutions (297890.KS), who will provide additional software to the Kateeva product and will service the tools.  HB Solutions is said to be developing its own IJP tools but at least for now will be the provider of the order for Kateeva.  No indication was given as to whether the SEMES tools will remain or be fully replaced by the Kateeva IJP tools, which are typically used for OLED encapsulation and Samsung is considering expanding QD/OLED production if the acceptance of the new technology is strong enough.  Should Samsung Display decide to expand production of the QD/OLED process, the question would then be whether they would go with Kateeva tools for the new lines or begin another bakeoff.  If the current scenario proves correct, we would expect Kateeva would have a strong shot as a primary IJP supplier.

Now that CES has come and gone and Samsung Electronics (005930.KS) has revealed a few (very few) details about its 2022 TV lineup, we went back to the  company’s 2021 line of Mini-LED/QD and QD only TVs that we have been tracking since their release in May of last year.  Without details from Samsung as to potential new sizes or model tiers, consumers remain locked in to last year’s models so we took a quick look at where prices are currently to see if things had changed over the last few weeks.  Of the 35 models in our list, only 8 remain at their lowest price since release, with 4 at their highest, and only one model saw a decline in price, while 17 of the 35 (48.6%) saw an increase since 12/21/21. 
The biggest increase was $1,000 (18.2%) for the 85” top-of-the-line 8K Mini-LED/QD set (900A), while the largest percentage increase was 33.3% for a 43” QD only model, which rose from $450 to $600.  In fact every 4K QD only model in Samsung’s lowest price tier for that category (60A) saw price increases, ranging from 4.5% to the aforementioned 33.3% increase.  Across all Samsung’s Mini-LED/QD and QD only TVs the average increase was 5.9%, leaving the entire line still down 18.7% from the original release prices.
Looking at the line on a price/m2 basis, the price has declined from $1.37/m2 to $1.00/m2 currently across the entire line, but each segment has seen its own changes from day one pricing on a $/m2 basis and on an absolute basis, as seen below.  We note that the 90A (Tier 3) was affected by the inclusion of a 98” model which was originally priced at $15,000 and remains at that price, which would account for the smaller rate of price decline, both on a $.m2 and an absolute basis seen in that tier.
All in, on a general basis, prices have been inching up since the low point in November for most models.  Given the tighter margins on tier 5 – 7 models, we expect them to more closely reflect the increased cost of materials and components, offset by declining panel prices.  Sets being sold today are likely to have been produced ~45 days ago, so they still reflect older inventory, so the question remains whether TV set manufacturers will bring down prices to reflect declining LCD panel prices or will they try to capture the cost difference now that 2021 unit volumes are set.  We expect the latter.

As we noted in yesterday’s graphic, Samsung Electronics (005930.KS) is the leader in the foldable smartphone market, and that leadership continues into the foldable laptop/notebook market, an even newer subset of the overall mobile CE market.  Along with these actual foldable products, Samsung and its display affiliate Samsung Display (pvt), have filed many patent applications for a slew of potential products that will continue to broaden the scope of foldables over the next few years, some of which we have taken a look at in our notes.  That said, filing a patent application has little bearing on whether the device(s) shown in the IP will become actual products, as much IP is used to keep others from heading down a similar development path, but, some do get translated into viable products, so we try to keep an open mind and look at the ones that seem ultimately practical or, at the least, unusual.
On 02/07/2021 Samsung Electronics filed a patent application for a “Multi-Folding Electronic Device” with WIPO (World Intellectual Property Organization), a United Nations agency that includes members from 93 countries (including the US and China) and has been administering international IP since 1967 and helps to connect IP systems from member countries to a global system (patentscope).
The patent shows a number of ‘embodiments’ or potential physical set-ups that look like a typical laptop in they have a screen and a keyboard, but then allows both the screen and the keyboard to be folded on hinges reducing the size of the device to 25% when closed.  Extrapolating on such a device would allow for a typical 15.6” (diagonal) folded laptop to have a screen (unfolded) that is 7.65” tall and 27.2” wide, along with a similar size keyboard, which could then be folded into a 7.65” x 13.6” form, the same as a typical laptop, or, if you wanted to go in the other direction, a typical 15.6” laptop could be folded into a 7.65” x 6.8” rectangle, ¼ of the size when fully open, making it much easier to carry.
Most foldable laptops that exist currently either have a virtual keyboard that takes up the bottom of the screen when unfolded, reducing viewing real estate, or uses an attached keyboard that is separate from the device.  Samsung’s patent allows for a real keyboard, something quite desirable for those who write rather than play games, and a large screen that could act as a virtual desktop.  Of course, such a device would not be cheap, if it appeared at all, but would be quite practical in either configuration, which makes it notable in our view.

​2021 was a difficult year for smartphone brands, facing relatively weak demand and supply chain and production problems.  Samsung had set a goal of shipping 300m smartphone units in 2021, an ambitious goal considering how things looked in early 2021, but Samsung held steadfast to its original goal.  That said in terms of actual shipments, they likely fell a bit short of that goal, given the ~45 day average time it takes for produced product to reach distributors or consumers, but they did at least meet that goal in terms of production, with the company itself producing 238.9m units and OEM/ODMs producing another 60m+, totaling just over 300m produced.
The chip shortage caused production bottlenecks, but more troubling were COVID-19 outbreaks that limited or halted device production, particularly for Samsung’s OEMs, whose assembly plants in India and Vietnam saw periodic work stoppages and production limitations.  Sporadic travel limitations in China also affected OEM smartphone production, but China was not a place where Samsung’s influence was felt, even with the ebb of former market leader Huawei’s (pvt) smartphone business, with the company selling fewer units than almost any of China’s top smartphone brands.
That said, Samsung was still the top global brand, at least through 3Q, even with the challenges, and relatively weak flagship (Galaxy S21 Series) sales of ~24m to 27m units, the second year where that series underperformed compared to earlier years (35m to 40m).  By focusing on mid-tier lines, the company was able to offset the S series shortfall and bring in production numbers above goal.  With the confidence of being able to meet those (production) goals in such a difficult year, Samsung is expecting to produce 285m units in 2022 internally, and an additional 48m to 50m from OEMs, an increase of roughly 10%.  As with most CE companies enthusiasm is quite abundant, regardless of the circumstances, especially early in the year, so who are we to rain on their parade this early in the year…