Samsung Sets New Foldable Pricing
Samsung Electronics (005930.KS) has tentatively set the price of its upcoming Galaxy Z Fold 3 and its Galaxy Z Flip 3 and as expected they are lower than previous models. That said, they are lower than we had expected, coming at $1,736 and $1,090 in South Korea. This compares against $2,092 and $1,439 for the previous models released last year and represents a decrease of 17% and 24.2% respectively. Looking at US prices, which are typically lower than those in South Korea, we note that Samsung has already reduced the price of last year’s Galaxy Fold 2 and Galaxy Flip from their original prices so there are two possible price points for where new prices could be calculated.
We note that these estimates make the assumption that Samsung would be consistent with the relative price on a global basis, which is a broad assumption, so we point out that these estimates are only to show one set of possibilities in terms of US pricing. While it would be exciting to see Samsung price a foldable phone below $1,000, we keep our expectations low, and while it would likely give Samsung a stronger chance of meeting its goal of selling between 6m and 7m foldable smartphones this year, the price would have to incorporate both lower production costs and the higher component prices we have seen over the last few months.
We believe Samsung affiliate Samsung Display (pvt) has been able to increase yield for its foldable products but we would expect with the rising cost of components, Samsung will face some difficulty in trying to fill the gap left by the poor selling Galaxy Note line, but by offering at least some discount to last year’s models they can stimulate expanded consumer interest in the foldable line, which we expect will eventually replace the Note. Whether they are able to maintain margins similar to the Note line under the above scenario is questionable, which is why we are expecting US pricing to be a bit higher than the above when announced in the US.
We believe Samsung affiliate Samsung Display (pvt) has been able to increase yield for its foldable products but we would expect with the rising cost of components, Samsung will face some difficulty in trying to fill the gap left by the poor selling Galaxy Note line, but by offering at least some discount to last year’s models they can stimulate expanded consumer interest in the foldable line, which we expect will eventually replace the Note. Whether they are able to maintain margins similar to the Note line under the above scenario is questionable, which is why we are expecting US pricing to be a bit higher than the above when announced in the US.
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