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Blown away by the innovation or the price? Samsung foldable phone opens new frontier

SAN FRANCISCO/SEOUL (Reuters) – Samsung Electronics Co Ltd is under the impression of the smartphone industry with the first fold-out screen, polishing innovation credentials, banishing “fast follower” of criticism, and, at nearly $ 2,000, setting a new standard in the premium rates.

The Samsung Galaxy Fold phone is displayed on a monitor of Samsung Electronics Co. Ltd. ‘ s Unpacked event in San Francisco, California, USA, 20 February 2019, REUTERS/Stephen Nellis

The South Korean tech giant-Galaxy Fold looks like a conventional smartphone, but opens like a book, revealing a second screen the size of a small tablet to 7.3 inches (18.5 cm). It will go on sale from 26 April.

At the launch event in San Francisco on Wednesday, Samsung upped the surprise factor by analysts and journalists on a large scale expect aspects in advance, such as 5G versions of the existing top-end Galaxy S phones.

The following disclosure of the foldable device came as a shock to many in the room.

“I’m blown away,” said Patrick Moorhead of Moor Strategy And vision, the add of the phone can help Samsung rejuvenate from the mobile business, whose lead is under attack from China’s Huawei Technologies Co Ltd.

“I believe you can innovate your way out of a mature market,” he said, noting that when Apple Inc launched the iPhone in 2007, most industry watchers believed that the market had matured to $100 “candy bar” phones without a touchscreen.

Bob O’donnell of TECHanalysis Research, said the work Samsung had done with Facebook Inc., Alphabet, Inc. Google and Microsoft Corp. to adapt applications for the new screen is important.

He said Samsung had teased the folding phone before, “to see it in action, see the software – I was like, Wow. It is extremely important that the software experience good.”

NEW PRICE STANDARDS

The phone, which can work on three apps at the same time and has six cameras, also challenges the idea of what a phone can cost, will debut at nearly double the price of the current top-of-the-line models from Apple and Samsung itself.

“Because of the price, it is likely to be sold mainly to early adopters. The prices are the key to expanding sales,” said the former Samsung mobile executive Kim Yong-serk, who is now a professor at the Sungkyunkwan University in Korea.

“It will help Samsung’s polishing of an image as an innovative company, but it is unlikely to be profitable. I expect Apple to wait say for one year, and come with foldable phones with more features, like they did with the smartwatch,” he said.

Real estate Hana Investment & Securities expect Samsung to sell 2 million foldable phones this year, with the price to keep the volume relatively low, while another brokerage expects shipments to 1 million. That would be less than one percent of the 291 million smartphones Samsung sold last year.

“The success of a foldable telephone is dependent on whether or not it can be the demand of the users of a tablet. We believe that it will be difficult to achieve significant sales by 7.3-inch screen,” Meritz analysts said in a note to clients.

“For it to succeed, it has to develop, so that it can support 10-inch or larger screen with multiple folds.”

Some industry watchers said foldable phones could eat into the tablet market, which shrunk by 6 percent last year even as Apple more iPads.

Apple 7.9-inch screen of the iPad Mini4, the smallest and cheapest tablet, is priced at $329 to $559. The AMERICAN company commands 25.8 percent of the global tablet market, nearly double that of the Samsung’s 13.3 percent.

Online, social media users were divided over the price, the features, and whether or not the consumer would even be a phone.

“Innovative? Sure. Need? Not sure. 6 cameras, 2 screens and 2 batteries for $1980?!?,” wrote Twitter user @JackPhan.

Reddit user AmazedCoder took a more positive view.

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“The fact that people only complain about the price should tell you that a lot of people that really want to, but can’t get. The second generation of this thing is going to sell like hot cakes.”

While most analysts expect Apple to wait until 2020 to match with the foldable phone, Samsung has new price standards in the premium category as it tries to revive the interest of the consumer in an industry that placed for the first time a decrease in the sales last year.

“$1980 dollar for a #galaxyfold no thank you… see…now the next iPhone will be $1999,” Twitter user @zollotech said.

Reporting by Stephen Nellis in SAN FRANCISCO, Hyunjoo Jin in SEOUL and Ambar Warrick in BENGALURU; Writing by Miyoung Kim; Editing by Christopher Cushing

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