Fan Edition Returns
Samsung (005930.KS) has had considerable success with what it calls the “Fan Editions” of a number of its smartphones, although the original “FE” model was a refurbished Galaxy Note 7, a phone that was recalled due to a overheating battery issue that caused some of the units to catch fire. The popularity of the original Note 7, before the problems were discovered, led Samsung to replace the batteries in unsold Note 7s and sell them as the “Note 7 Fan Edition” about a year after the original release, which both attracted considerable attention and allowed Samsung to recoup a bit of the loss incurred during the recall. The concept of a limited number of units that were similar to the original model, selling at a discount, gave a bit of cache to what might have looked like a heavily discount flagship smartphone, if the ‘FE’ moniker was not attached, so Samsung continued the idea with the release of the Galaxy S21 FE, a $700 version of the Galaxy S21 flagship, which sold for $1,000. The S20 FE, released in October of last year (S20 was released in March 2020) also proved popular, with Samsung expecting to do the same with this year’s Galaxy S21.
Unfortunately, as we noted a number of times in June that the Galaxy S21 FE, which was originally expected to be released in August, was expected to be sold only in the US and Europe, due to a shortage of Qualcomm (QCOM) application processors, and later that production was halted for the same reason, with vague plans about pushing out the release until October. It seems that Samsung has put the S21 FE back in production and while plans have yet to be finalized, the S21 FE is expected to be released some time in 4Q although likely in limited quantities at the onset.
The good news is that Samsung’s return to production of the FE indicates that the shortage of application processors, at least for Samsung, is easing a bit, which could allow Samsung to have at least some chance of getting close to its internal smartphone shipment and share goals, especially given the popularity of the Fan Edition series. That said, much will be determined by how many units Samsung can garner and when it is released, as it is already a month late and likely will be a bit capacity constrained going forward. While overall foundry capacity remains tight, especially at 28nm and larger nodes, the Qualcomm AP is produced at Taiwan Semi (TSM) on 7nm (2nd Gen) so it is competing with high-end customers for fab time, rather than against every other foundry customer. This obviously did not matter over the last month or so given the production halt, but Samsung seems to have been able to regain fab time at TSM recently, which could give them the ability to push FE production and squeeze out product up to and during the holidays.
Unfortunately, as we noted a number of times in June that the Galaxy S21 FE, which was originally expected to be released in August, was expected to be sold only in the US and Europe, due to a shortage of Qualcomm (QCOM) application processors, and later that production was halted for the same reason, with vague plans about pushing out the release until October. It seems that Samsung has put the S21 FE back in production and while plans have yet to be finalized, the S21 FE is expected to be released some time in 4Q although likely in limited quantities at the onset.
The good news is that Samsung’s return to production of the FE indicates that the shortage of application processors, at least for Samsung, is easing a bit, which could allow Samsung to have at least some chance of getting close to its internal smartphone shipment and share goals, especially given the popularity of the Fan Edition series. That said, much will be determined by how many units Samsung can garner and when it is released, as it is already a month late and likely will be a bit capacity constrained going forward. While overall foundry capacity remains tight, especially at 28nm and larger nodes, the Qualcomm AP is produced at Taiwan Semi (TSM) on 7nm (2nd Gen) so it is competing with high-end customers for fab time, rather than against every other foundry customer. This obviously did not matter over the last month or so given the production halt, but Samsung seems to have been able to regain fab time at TSM recently, which could give them the ability to push FE production and squeeze out product up to and during the holidays.
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