Samsung aims for foldable phone sales to surpass Note sales

Samsung Electronics said it aims to see sales of its foldable phones surpass the discontinued Note series of smartphones as it seeks to boost the profitability of its mobile division.

Song Joon Cho | Bloomberg | Getty Images

Samsung hopes to bring its foldable phones into mass production, saying on Thursday it aims for sales of such devices to surpass sales of the popular Note series of phones.

The South Korean electronics giant is hoping to boost sales of its foldable phones to boost profitability for its mobile division, which has been hit by rising material costs and declining consumer demand.

Samsung first released the Note smartphone model in 2011. Years later, it achieved success with larger screen sizes in an era when its competitors had smaller displays.

But as smartphones continued to grow, including Samsung’s flagship S-series devices, the Note was eventually discontinued. Instead, the Galaxy S Ultra filled the void. The Note 20, released in 2020, is the latest phone in the Samsung series.

Samsung’s first foldable phone, the Galaxy Fold, was released in 2019 after some technical issues. The company has since released a number of other models.

But foldable phones still have a niche in the overall smartphone market. Samsung hopes to make them “mainstream,” according to an earnings report released on Thursday, with the aim of boosting the profitability of its smartphone division.

“In the second half of the year, we will continue to maintain the sales momentum of our S series, and will also use the new folding series that will be launched to provide sales in excess of the sales that we used to report using the Note series,” This was on a conference call Sung Koo Kim, vice president of the company’s Mobile Engagement Division, said Thursday.

It’s unclear what timeline Samsung is referring to for foldable devices to outsell Note sales, given that the latest device is currently out of production. Samsung was unable to elaborate when it contacted CNBC.

For reference, according to IDC, Samsung has shipped 190 million Note units over the life of the phone. So far, Samsung has shipped over 10 million foldable phones.

Samsung has shipped about 12 million Note 20 phones, the latest in the series, and about 14 million Note 10 devices. This compares to 8 million Galaxy Z Flip 3 and Galaxy Z Fold 3, Samsung’s latest foldable phones.

The company is gearing up to release new foldable devices next month.

“It makes sense for Samsung to bet on foldables: it’s a high-margin premium product that drives average selling prices and sets Samsung apart from the competition,” Brian Ma, an analyst at IDC, told CNBC.

“Even if the Note line still has a dedicated following, it’s now ten years old, so the company’s commitment to foldables allows the company to stay one step ahead.”

Indeed, the profitability of the smartphone division is a top priority for Samsung. According to Samsung, in the second quarter, mobile business profits declined quarter-on-quarter due to higher costs and “adverse currency effects.” However, revenue increased year-over-year, driven by higher sales of premium models such as the S22 series smartphones and Tab S8 tablets.

Samsung’s Kim expects the smartphone market to remain flat or grow slightly in the second half of the year. Foldable phones will be a key part of Samsung’s drive to boost profitability.

The company said it will “ensure consistent profitability by targeting sales of foldable devices that outperform those of the Galaxy Note series and fully mainstream foldable devices, delivering a differentiated consumer experience through a global partnership.”