Samsung launches a 5G phone and a tablet you can fold in half

With the launch of its first 5G smartphone as well as its first foldable screen Samsung has grabbed the pre-MWC headlines but what is the point of either device?

As is so often the way with new convergent product categories, this first attempt to make something that is both a phone and a tablet seems to have resulted in something that isn’t much good at being either. Essentially it’s a small tablet that can fold in half to make a very chunky phone, with a hefty price tag to match.

But we mustn’t be too negative. Samsung has been teasing the bendy screen for years and actually putting one into a commercial device is an impressive achievement. Its first effort was always going to be more of a public prototype than anything a normal person would consider buying, but it is as a commercial offering that it should be judged.

The Galaxy Fold uses a new display technology Samsung is calling ‘Infinity Flex’, which is an AMOLED screen that can be folded in half. Hence you have a 7.3-inch tablet that, when folded, becomes a 4.6-inch phone. Thus you have all the portability of a phone combined with the viewing experience of a tablet, or so Samsung would have us believe.

“Today, Samsung is writing the next chapter in mobile innovation history by changing what’s possible in a smartphone,” said DJ Koh, Samsung’s head of mobile. “Galaxy Fold introduces a completely new category that unlocks new capabilities never seen before with our Infinity Flex Display. We created Galaxy Fold for those that want to experience what a premium foldable device can do, beyond the limitations of a traditional smartphone.”

We note with dismay that Samsung has adopted Apple’s irritating habit of dropping the definite article when referring to its products, as if they’re a person rather than a thing. But that’s not enough to distract us from the fact that 7.3-inches is very small for a tablet market in which ten inches has become the norm and that, when folded, the phone is inevitably much fatter than we’ve become accustomed to with regular smartphones. Oh yes, and it costs two grand (dollars).

We spoke to Neil Mawston of Strategy Analytics to get his take on it. “Samsung Fold is the world’s most important smartphone launch since Apple iPhone in 2007,” he said. “Samsung’s Fold is a very good first-generation device. The Fold is relatively expensive, bulky and heavy, but the foldable industry has to start somewhere and this is a pretty good beginning.

“We forecast global foldable smartphone revenues to rise from zero in 2018 to US$2 billion in 2019. Foldable designs will account for 1% of all smartphones shipped worldwide in 2019. The first buds of the foldable smartphone era are starting to sprout.

“Foldable smartphones are a luxury gadget today, a premium product in a year or two, and a midrange device in five or so years. Think of foldable smartphones at the moment as a Rolex watch or Ferrari supercar, a show-off product for status-seekers with deep pockets.”

One last question mark comes courtesy of our eagle-eyed video producer and resident gadget geek Pierre. He noticed in the unveiling video that the opened-up screen doesn’t seem to be perfectly flat. As you can see in the screenshot below, only one half of the screen is reflecting the spotlight, which strongly implies it doesn’t open up to the full 180 degrees. Hmmm.

Galaxy Fold screenshot

Somewhat overshadowed by all this foldy fun was the launch of Samsung’s latest flagship smartphone family, the Galaxy S10, S10+ and S10e. So we now have the ‘e’ variant as the lowest-priced version ($750) and then the option of two increases in size, spec and price ($900 and $1,000). The infographic at the bottom shows how the biggest one has been upgraded from last year.

The most interesting part of that launch, however, was the promise of a 5G version hitting the shelves of US operator Verizon in Q2 of this year. The Galaxy S10 5G will be even bigger than the S10+, with its 6.7-inch screen barely smaller than the foldy one, which once more begs the question of what the point of the latter is.

Other than that, details are a bit thin on the ground, including price, although we can safely assume it will cost a fair bit more than the S10+. We do know the 5G modem is the Snapdragon X50, however, with Qualcomm wasting little time in crowing about that. It also flagged up the first commercial use of its 3D Sonic Sensor, which allows fingerprints to be scanned through the screen.

“Samsung S10 is relatively well priced for its premium features, and Samsung seems to have learnt from the S9 overpricing debacle last year,” said Mawston. “Samsung’s S10 range carries some rare or near-unique features, such as 5G and Wireless Power Share for phone-to-phone recharging. Of course, Samsung’s rivals are not standing still. For example, Huawei is pumping out plenty of premium smartphones with standout features, such as the Mate 20 X with a huge 7.2-inch screen.”

Samsung announced a bunch of European 5G operator partnerships that will support the launch of the S10 5G across Europe in the middle of this year. The following operators served up canned quotes from their CEOs saying how excited they are, which we will spare you: DT, EE, Orange, Sunrise, Swisscom, TIM, Telefonica and Vodafone.

In summary this was an impressive array of launches from Samsung, presumably timed to steal the thunder away from other launches that typically take place on the Sunday before MWC starts. The foldy phone as it is now just seems to be an expensive gimmick, but we may eventually view it as the start of an era. The same goes for the S10 5G, which will initially have very little 5G network to work with, but is nonetheless a milestone in the evolution of the smartphone industry.


Galaxy S10+ infographic

Samsung looks to capitalise on Huawei’s woes

Samsung is reported to be investing heavily in infrastructure business to fill the market gap left by Huawei’s ban from 5G business in the developed markets.

Sources inside Samsung and other industry executives have told the Reuters that Samsung is pouring resources into its telecom infrastructure business unit, aiming to seize the opportunity created by the ban on Huawei in a number of important western markets. Samsung’s infrastructure business had been insignificant until recently, trailing Huawei, Nokia, Ericsson, Cisco, and ZTE, according to figures from the research firm Dell’Oro Group. But it saw a chance when first ZTE then Huawei found themselves being shut out of the lucrative 5G markets in one country after another in the developed world.

To join the ranks of Ericsson and Nokia, Samsung is said to be moving strong management resources as well as software engineers from the smartphone unit to the infrastructure business and to have started charming Huawei’s current customers. One of the global heavyweights that has been impressed by what Samsung has got to offer is Orange. After visiting Japan, where Samsung was conducting a 5G trial, Mari-Noëlle Jégo-Laveissière, Orange’s CTO, was happy to include Samsung in its shortlist of alternative suppliers, after the telco decided to ban Huawei, its long-term top supplier, from its 5G business in France. An Orange 5G trial with Samsung will be conducted this year.

One difficulty Samsung needs to overcome is the shortage of talents. To start with it needs good engineers. To this end, Samsung’s heir apparent and de facto head Lee Jae-yong, or Jay Y. Lee as he is known in the western world, has sought the support from the Prime Minister when the latter visited Samsung in January. “We need more software engineers and want to work with the government to find that talent,” Lee was quoted by government officials. Samsung’s infrastructure unit has a workforce of about 5,000 people, both Nokia and Ericsson employ more than 100,000 people, and Huawei is said to have employed 200,000 people.

Another type of people Samsung needs to get onboard is those that can build operator relations. This needs a different skill sets from what Samsung has excelled in dealing with distribution channels for its smartphones, and it needs them to be in all the right places in the mature markets, and, better still, to have already worked with the potential operator customers. Due to the nature of business, trusty relationship with telcos often need to be cultivated for years or even decades.

However, Samsung may have just chosen a perfect timing for expansion. Both Ericsson and Nokia are laying off people, either wholesale shutting down of full business units, or selectively downsizing certain teams. Many of these functions have actually had customer interface experience. Huawei’s founder meanwhile has warned that the company may also need to adopt some cost control measures. Though they could not bolster Samsung’s strengths to the same level of its competitors, these could all be good recruitment targets for Samsung to pounce.

UK and US smartphone markets in steep decline

The latest numbers from industry trackers Strategy Analytics reveal UK smartphone shipments fell 14% in Q4 2018.

The main culprit seems to be UK smartphone market leader Apple, which seems to be having a bit of a nightmare all over the world right now. Apple shipped 700,000 fewer iPhones in Q4 2018 than it did in the year ago quarter, which is a drop of 19%. Second placed Samsung suffered a similar decline, dropping 400k shipments. This placed Huawei actually managed to increase its shipments by 200k, which meant it stole a big chunk of market share from the big two.

“Despite fear of trade wars and Brexit, Huawei has cracked the UK smartphone market,” SA’s Neil Mawston told Telecoms.com. “If current growth trends continue, Huawei will overtake Samsung as the number two UK smartphone player later this year. Samsung’s UK smartphone marketshare has halved in the past five years, and it must take urgent steps to arrest the decline, before it is too late, but he ‘big 3′ brands still made up three in four of all smartphones sold in the UK last year.”

“UK smartphone shipments declined 14 percent annually from 8.5 million units in Q4 2017 to 7.3 million in Q4 2018,” said Rajeev Nair of SA. “United Kingdom is the largest smartphone market in Western Europe and it is suffering from weak sales, due to longer replacement rates, a lack of wow designs, and Brexit uncertainty causing consumers to hold off on some new purchases.”

“Samsung clung on to second place with 19 percent smartphone marketshare in the UK during Q4 2018, down from 21 percent a year ago,” said Woody Oh of SA. “Samsung is facing intense competitive pressure from Huawei, who is targeting Samsung’s core segments in the midrange and premium-tier with popular models such as the P20. Huawei’s UK smartphone marketshare has leapt from 8 percent in Q4 2017 to 12 percent in Q4 2018. Huawei is growing fast in the UK, due to heavy co-marketing of its models with major carriers like EE.”

 

UK Smartphone Shipments (Millions of Units) Q4 ’17 Q4 ’18 Growth YoY (%)
Apple 3.7 3.0 -19%
Samsung 1.8 1.4 -22%
Huawei 0.7 0.9 36%
Others 2.3 2.0 -15%
Total 8.5 7.3 -14%
UK Smartphone Vendor Marketshare (%) Q4 ’17 Q4 ’18
Apple 43.5% 41.1%
Samsung 21.2% 19.2%
Huawei 7.8% 12.3%
Others 27.5% 27.4%
Total 100.0% 100.0%
Source: Strategy Analytics

SA has also been looking at the US market recently and while the shipment decline is even worse on the other side of the pond, seems that Google’s Pixel brand is starting to get some serious traction over there.

“Google’s Pixel 3 range benefited from weakness at Apple, Samsung, ZTE and others,” blogged Mawston. “Apple saw longer replacement rates, due to its battery-replacement program encouraging owners to hold on to existing iPhones for longer. Samsung struggled, due to soft sales of the flagship Galaxy S9 model. ZTE was shunned by authorities and carriers and demand for its smartphones collapsed. Google Pixel 3 is starting to resonate with US consumers who are searching for something new, such as eSIM connectivity or AI.

SA Q4 2018 US smartphone chart

Full-year global smartphone market declines for the first time

For five consecutive quarters the global smartphone market has registered year-on-year decline, marking the first time it has shrunk on annual basis since the first iPhone defined the category in 2007.

The size of the contraction is believed to be around 4-5%, according to some research firms. Among the leading smartphone makers, Huawei was the only one that has bucked the trend by increasing its sales volume and vastly improving its market share. By some estimate it is almost neck and neck with Apple.

“Huawei grew 35 percent and shipped a record 205.8 million smartphones globally in full-year 2018,” said Woody Oh, Director at Strategy Analytics. “Huawei is now just a whisker behind Apple, who shipped 206.3 million iPhones last year. Huawei is massively outgrowing the iPhone and we expect Huawei to overtake Apple on a full-year basis worldwide for the first time in 2019.”

In general, the leading Chinese brands, including OPPO, vivo, and Xiaomi (in addition to Huawei) have been aggressively expanding overseas to compensate the weak domestic market. According to the estimates by Counterpoint Research, 46% of the Chinese brands’ total volume was shipped outside of China, up from 33% a year ago. “The collective smartphone shipment growth of emerging markets such as India, Indonesia, Vietnam, Russia and others was not enough to offset the decline in China, which was responsible for almost 1/3 of global smartphone shipments in 2018. With China showing little or no sign of recovery due to various politico-economic factors, Chinese brands are looking to expand overseas,” said Shobhit Srivastava, an analyst from Counterpoint. “To increase market share, Chinese brands have been aggressive in both hardware/software design and marketing.”

Despite being badly hit in the smartphone market in 2018 (and foreseeing continued difficulties in 2019), Samsung was still able to hold on to the overall market leader position. “Samsung shipped 69.3 million smartphones worldwide in Q4 2018, dipping 7 percent annually from 74.4 million units in Q4 2017. Samsung remains the world’s number one smartphone vendor, despite intense competition from Apple, Huawei and others across core markets of India, Europe and the US,” commented Neil Mawston, Executive Director at Strategy Analytics.

Calculating Q4 was made further complicated as this was the first quarter that Apple would not publish the iPhone shipment volume (though it continues to publish iPhone revenues). We sampled three research firms’ published numbers on the market size and vendor share, each of them making their judgement call on Apple as well as other firms that do not publish their shipments.

Both Counterpoint Research and Strategy Analytics believed Apple sold 66 million iPhones in the final quarter of 2018, presumably by applying the announced year-on-year 15% decline of iPhone revenues directly on the volume. This is a crude methodology, as it would assume the average selling price (ASP) of the iPhones has remained constant from a year ago. The new models released in 2018 were sold at much higher price points than their predecessors from 2017. To couple this with Apple’s decision to discontinue some older, cheaper models, the iPhone ASP should only go up, which means its volume decline should be bigger than 15%, though by how much is anyone’s guess.

On the other hand, Canalys estimated that 71.7 million iPhones were sold in Q4, or a 7% decline from Q4 2017. As a matter of fact, the firm, based on this estimate, declared that Apple overtook Samsung to be the market leader in Q4. This calculation implies Apple must have vastly discounted the iPhones to drive up volume. This is not entirely impossible, but it has not been reported broadly.

Smartphone 2018

The foldable phone will reportedly be with us next month

It’s been rumoured for months and an ambition of the industry for years, but it seems Samsung is almost ready to unveil a foldable phone in a few weeks times.

According to the Wall Street Journal, Samsung is set to reveal a foldable phone at various launch events around the world on February 20, a week ahead of the industry’s annual bonanza in Barcelona. Traditionally Samsung has launched new flagship devices at Mobile World Congress, but it appears the team is determined to beat Huawei to the punch, with the Chinese also rumoured to be pretty close with their own device.

Although Samsung still claims the number one spot for smartphone sales worldwide, it must be peering over its shoulder with Huawei’s recent momentum. Having overtaken Apple to secure the number two spot, Huawei is certainly on a good run, despite political pressure and suspicion over its relationship with the Chinese government.

A prototype of the device was showcased at a series of events last September, though people familiar with the matter claim three new, foldable devices will be hitting the shelves in March. There is yet to be any form of official confirmation as of yet, though it is also believed a fourth device will follow the initial launch; this model will be 5G compatible.

There are still a lot of questions surrounding the device, but one thing is clear; this is the sort of innovation the industry has been craving for years.

When you look at the reality of smartphones, there hasn’t been any genuine disruption for years. Each new flagship brings incremental advances in features and usability, a better screen or less battery intensive applications for example, but nothing could really be described as ground-breaking, despite what the manufacturers tell you. The last genuine disruption to the smartphone space was probably Apple ditching the keyboard a decade ago.

This stumbling period of innovation is probably one of the factors which contributed to the global slump in smartphone sales in recent years. Despite a lack of new features, manufacturers have been asking consumers to produce more cash, indirectly encouraging trends which have seen product lifecycles and the popularity of second-hand or refurbished phones increase.

Whether the phone will be any good remains to be seen, but one thing is for sure, this is a device which will certainly attract attention at Mobile World Congress next month.

Samsung imposes Facebook on its smartphone customers and blocks uninstall

Smartphone giant Samsung has apparently struck a deal with Facebook to force the installation of the app on its phones.

The move, which was highlighted by Bloomberg, is not by itself remarkable. It’s not uncommon for smartphone OEMs to partner with third parties to preinstall their stuff on phones, although push-back against ‘bloatware’ has made this less common than it once was. What is causing some degree of backlash is the fact that it’s not possible to uninstall this imposed Facebook app, only to disable it.

The Bloomberg story quotes a Facebook spokesperson as saying the disabled app is effectively uninstalled as is no longer collects data for Facebook, but if that’s the case then why prevent its removal? Samsung didn’t provide Bloomberg with any further explanation.

This correspondent can confirm that this doesn’t just apply to new phones. I recently did a factory reset of my old Samsung Galaxy S7 in order to bequeath it to my son. Once the process was complete I was surprised to see the Facebook app appear on the home screen and can confirm that I wasn’t given the option to uninstall it.

Which raises a significant issue with the imposition of social media apps on phones that other reports seem to have overlooked: mental health. In a recent appearance on the Joe Rogan podcast, social psychologist Jonathan Haidt revealed a sharp increase in reported mental health issues among US teenagers and young adults in the last decade. As you can see in the clip below he theorises that a major contributing factor to this is social media use, especially on smartphones.

Many parents, this one included, have decided that their children should not use any form of social media, including IM apps such as Whatsapp, due to the threat they pose to their mental health. Not only does social media seem likely to make children more socially obsessive, self-conscious and distracted, it also facilitates some forms of bullying and leaves a digital footprint that it seems likely their adult selves will regret.

For this reason, on top of the general arrogant presumption involved in trying to commercially manipulate your own customers, this looks like a bad move by both Samsung and Facebook. Neither of them are in the strongest position to throw their weight around these days and the smartest thing to do in the light of this revelation would be for them to reinstate the ability to uninstall the Facebook app from Samsung phones.

 

Samsung warns sales and profits are going down the toilet

Korean giant Samsung has become the latest major tech company to warn about significant under-performance towards the end of 2018.

In its earnings guidance for Q4 18 Samsung Electronics advised that it expects sales of around 59 trillion Korean won and 10.8 trillion Korean won. In the same quarter a year ago it racked up sales of 66 trillion and profits of 15 trillion, so that’s a pretty major drop-off, especially for profit, with margin dropping from 23% to 18%.

Analysts expected a bit of a drop in profit, according to Bloomberg, but only as low at 13.8 trillion. The same story points the finger at the trade aggro between the US and China as a major reason for the drop off, citing reduced demand for memory chips which are a big thing for Samsung.

Among the companies presumably buying less chips is Apple, which also issued a sales warning last week, thanks largely to smartphone demand dropping off a cliff in China. Samsung has blamed its woes on ‘mounting macro uncertainties’ affecting chip sales and good old ‘intensifying competition’ in the smartphone market.

The latter claim seems somewhat implausible in the light of Apple’s recent admission. What seems more likely is that the downward trend in smartphone demand has accelerated, compounded by the fact that neither of Apple or Samsung’s latest flagship models offered much to entice people to upgrade. Two-year-old smartphones still do a decent job so upgrade cycles are extending, which means lower sales for the foreseeable future.

Samsung reckons its new smartphone UI is more intuitive than ever

The latest user interface for Samsung smartphones – One UI – tries to account for larger screens while avoiding excessive clutter.

“These days, our smartphones are so much more than phones,” opens the press release, apparently hoping to convey Samsung’s profound understanding of the current smartphone situation. All this extra functionality, we’re told, has caused many UIs to become cluttered. This is not a trap Samsung is about to fall into anytime soon.

“Samsung’s One UI is the company’s most simple and streamlined UI yet, built from the ground up to help users focus on what matters most,” effuses the release. “One UI’s intuitive design fosters convenient interactions, while its clean aesthetic minimizes clutter to make viewing your screen more comfortable.”

One fairly sensible innovation is to force most of the stuff you might need to interact with towards the bottom of the screen, where the average thumb has a better chance of reaching it. Now that smartphone screen sizes in excess of six inches have become commonplace, superhuman feats of manual yoga are often required to interact with them, which can be trying.

Somewhat less welcome is the apparent aim of presuming how much of a given app the user might want to see at a given moment. In order to do this “One UI keeps things simple, displaying only the functions and info the user needs to complete their task.” This seems pretty presumptuous and an example of a company overstepping the mark in its desperation to innovate and appear to be useful.

Xdadevelopers had a good play with One UI recently and concluded little more than grudging acceptance of its inevitability, given the evolution of the smartphone form factor. Custom UIs are a delicate balance as they present one of the few ways for an Android OEM to appear to innovate, but a bad one can drive users away. Samsung seems to have struck an OK balance here, without setting the world on fire.

iChief’s Samsung tie up is long overdue

The first (proper) week in January always promises a deluge of stories from CES and one opening gambit is a content-based partnership between Samsung and Apple, which should probably have happened much sooner.

Beginning in the Spring, new Samsung Smart TV models will offer iTunes Movies & TV Shows and Apple AirPlay 2 support for Apple customers, while 2018 models will also be made compatible via firmware update. iCultists with Samsung TVs can access their existing iTunes library and browse the iTunes Store to buy or rent new content, while Apple content will also work with Samsung’s Smart TV Services, such as Universal Guide, Bixby and Search.

The iTunes Movies & TV Shows app will feature on Samsung Smart TVs in more than 100 countries, while AirPlay 2 support will be available on Samsung Smart TVs in 190 countries.

On the surface this could be a very positive partnership for Apple and Samsung, both of whom have struggled to make a significant impact when searching for diversified revenues.

“Fascinating move as both companies have struggled to make strides in services,” said independent tech and telco analyst Paolo Pescatore. “Arguably it is a smart strategic move for both companies which underlines the need for companies to work more closely together. Samsung has made numerous failed moved in video services while Apple is still seeking to crack the TV landscape.”

Looking at Apple to begin with, this is a move which should have perhaps happened a while back. Stagnation trends in the devices and hardware segments will not have surprised anyone in the Apple business, this is the reason why CEO Tim Cook has been emphasising gains in the software and services business units so proudly, but it is now abundantly clear the ‘us versus everyone else’ mentality which made Apple great will not work outside its traditional stomping ground.

Apple has seemingly long-defied trends in the technology world by swimming against the ‘open’ euphoria. This mentality dates back to its stubborn but brilliant founder Steve Jobs, who constantly resisted the idea of openness, instead tightly integrated Apple within Apple, creating a closed ecosystem which forces iLifers to buy more Apple products. Back during a 2010 earnings call, Jobs stated “open systems don’t always win”.

When Apple was creating wonderful products, with each new release offering a brilliant new feature, this was enough to ensure the loyalty of customers despite the closed nature of the Apple business. However, innovation in the hardware segment has stalled and the closed mentality does not work in the software and services world. What some proof? Have a look at the profit warning last week.

The profit warning was the first one released by Apple in 15 years, and despite progress being made in the software and services segment, the gains could not compensate for the downturn. Although Cook pointed the finger of blame at a slowing Chinese economy, the team could not convince enough consumers to buy the ludicrously priced flagship devices in other territories either. This is a wider trend in the hardware segment, consumers are extending the lifecycle of current devices, while some are leaning towards second-hand models, but the software and services unit could not fill the $5 billion hole created.

To make the content business work, Apple will have to become a more open company, adopting the culture which it has resisted for so many years, and in Samsung it has an interesting partner.

In Samsung, Apple has found something which its own smart TVs cannot deliver; scale. According to market research firm NPD, Samsung is the leader in the US premium smart TV market (August report), holding 34% market share. Considering just over 43% of Apple’s revenue comes from the Americas, this is potential a very positive catapult to secure additional services revenues from customers. And this is before we’ve even started talking about the other territories.

Samsung is another business which has struggled to make headway with alternative revenue streams, though its prominent position in the premium home electronics space offers an excellent opportunity for the aggregator business model. When looking for new money each business has to decide where it can add value to the ecosystem; sometimes it is offering new products in parallel segments, but occasionally it means helping other businesses achieve their ambitions. Embracing openness could be an excellent move here.

If Apple wants to make any meaningful impact on the software and services industry, it will have to move away from the closed mentality which brought it success in the Jobs era and embrace the idea of collaboration. It will certainly be difficult to redirect such a massive supertanker, but one thing is clear; the faltering hardware segment, as it currently stands, will not support Apple’s indulgent ambitions.