Note Note

Note Note 
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Rumors concerning the demise of Samsung’s (005930.KS) Galaxy Note Series smartphone line have been circulating for over a year, and while there has been no ‘official’ statement that the Note will no longer be produced, it seems that we have seen the last Note smartphone this year.  One of the most important functions of the Galaxy Note series, which was considered the ‘highest-end’ model in the Samsung smartphone line, was the S-Pen, giving the device the ability to be used for note-taking, particularly for business users, along with large screens that created the ‘phablet’ category, between a smartphone and a tablet.  Sales of the original Note were stronger than expected and subsequent models continued that strength, and Samsung used the Note to introduce curved edges with notification displays in 2014, but in 2015 Samsung tried to expand the appeal of the Note to consumers and made the device less complicated to use, alienating some of its original fans.
In 2016 the company skipped the number 6 and released the Note 7, which included an iris scanner, opening it to secure payments, and a translation feature, trying to woo back the business customers it lost with the Note 5.  Pre-orders for the Note 7 were at record levels but when reports of the phone overheating and exploding began to appear Samsung issued a recall and replacement of the Note 7.  Unfortunately some of the replacements also overheated and burned forcing Samsung to fully recall the Note 7 only 60 days after its release.  Not to be taken down by a recall, Samsung released the Note 7 FE (Fan Edition), a refurbished Note 7 with a smaller (and safer) battery in 2017, starting the FE series that continues today. 
The Note 8, which allowed the phone to be connected to a keyboard and monitor, acting as its own computer, was a popular device, but the Note 9 saw few technology changes and sold poorly, pushing Samsung to create two sizes for the Note 10, with the smaller size attempting to attract women.  With sales of ~12.7m in 2019, Samsung tried to follow up with the Note 20 models but saw sales fall under 10m units, and with no new Note model this year sales continued to decline.  Samsung has now taken the S-Pen, the most popular Note feature and added it to the Galaxy S21 Ultra and the Galaxy Fold 3, eliminating the need for the Note line while following Samsung’s long-term goal of pushing all of its technology through the entire smartphone line, rather than keeping the ‘cool’ stuff just for the flagship models.
Given that the Note models were usually sold at a premium to other flagship smartphone line, the Galaxy S series, Samsung needed a replacement for dwindling Note sales, and while the Galaxy S series continues, the product differentiation afforded the foldable line and its success gives Samsung the option of cancelling the Note line without a long-term effect on margins.  The cost of producing foldables will continue to decline as will the cost of the components needed to accommodate the technology and Samsung has planned to produce 13m Galaxy Folds and Flips in 2022, which would bring foldable shipments back to the Galaxy Note’s 2019 sales level and exceeding the Note’s combined sales for 2020 and 2021.  With little competition from Chinese smartphone brands[1], Samsung’s foldables are the logical alternative to the Note, which was seeing increasing competition from Chinese brands and Samsung Display (pvt), the display production subsidiary of Samsung Electronics, is said to have a foldable display production target of 16m units in 2022, up from 8m this year, which includes foldables for laptops.


[1] 3Q ’21 Samsung Share – Foldables – 93% - Source: DSCC