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Foldable phones remain out of reach for most South Africans

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 11 Jul 2024
Samsung’s 256GB Galaxy Z Fold6 model costs R43 499, the 512GB Galaxy Z Fold6 will retail for R45 999 and the Galaxy Z Flip6 costs R25 999.
Samsung’s 256GB Galaxy Z Fold6 model costs R43 499, the 512GB Galaxy Z Fold6 will retail for R45 999 and the Galaxy Z Flip6 costs R25 999.

While Samsung is already on the sixth iteration of its foldable series, in general, these advanced devices remain out of reach for most consumers, despite their appeal.

Yesterday, the South Korean smartphone manufacturing giant introduced its latest foldable smartphones: the Galaxy Z Fold6 and Galaxy Z Flip6.

The foldable smartphones, together with an expanded portfolio of wearables, were unveiled during Samsung’s Galaxy Unpacked event, livestreamed from Paris to a local audience in Johannesburg.

Samsung’s new fold series comes equipped with Galaxy AI features. The 256GB Galaxy Z Fold6 model has a price tag of R43 499, while the 512GB Galaxy Z Fold6 will retail for R45 999. The Galaxy Z Flip6 costs R25 999.

Costly barrier

Arnold Ponela, senior research analyst at IDC, highlights that despite initial setbacks due to high prices and build quality issues, foldable smartphones are beginning to attract significant consumer attention, with a gradual increase in annual shipments.

“From a consumer perspective, foldables represent the most innovative visual change in smartphones to date, making them an essential segment for vendors to consider. However, the cost remains a substantial barrier, keeping these advanced devices out of reach for most customers.

“Notably, the foldable phone market achieved a 40% year-on-year growth in 2023, compared to just 1.2% for standard smartphones, yet foldables still account for only about 1% of total smartphone shipments.”

Ponela says South African consumers are increasingly being enticed by the foldable smartphone segment, evidenced by robust sales driven by targeted promotional efforts.

“As prices gradually become more competitive and build quality improves, interest in these innovative devices is growing.

“The unique form factor and enhanced functionality of foldables appeal to tech-savvy consumers keen on embracing cutting-edge mobile technology. The steady year-on-year growth in shipments indicates a positive trend and growing market interest.”

A TrendForce report shows global shipments of foldable phones are expected to reach 17.8 million units in 2024, making up 1.5% of the smartphone market.

Samsung commanded over 80% of the market share in 2022, following the launch of the Galaxy Z Fold 4 (priced from R20 000 to R30 000).

However, increasing competition from various brands in 2023 and 2024 saw Samsung’s global market share drop to just above 60%. This was despite the launch of the Galaxy Z Fold 5 late last year.

Commenting ahead of Samsung’s Galaxy Unpacked, research firm Canalys highlighted the event as a critical point in Samsung’s foldable strategy.

Sheng Win Chow, Canalys analyst, says: “In 2023, despite the overall market growing, Samsung’s share of the foldable smartphone market fell to 63%, due to surging competition and price sensitivity. It is vital for Samsung to bring back momentum.

“To stand out, we expect Samsung to lean further into Galaxy AI to explore new integrations and features with its foldables and wider ecosystem categories. Samsung’s S24 series received a strong reception in Q1 24. Galaxy AI will strengthen Samsung's ultra-premium offering, which is expected to lift its foldable performance in H2 24.”

Asked what consumers think about advanced AI on smartphones, Canalys analyst Runar Bjørhovde comments: “Foldables continue to be a market niche for consumers who normally buy premium devices. Our research shows a stronger interest in advanced AI features and capabilities, though it varies greatly between geographies.

“Integrating AI capabilities into foldables can help enable unique features and apps for the form factor, while taking a step further toward mass-market adoption. But current price points are likely to remain a barrier for broad market uptake.”

Arnold Ponela, senior research analyst at IDC.
Arnold Ponela, senior research analyst at IDC.

According to Ponela, Samsung has a strong presence in SA, and has differentiated itself from the other smartphone makers in the market. However, competition is on the rise.

Brands that have launched foldables locally include Huawei, Xiaomi, Oppo and Honor.

The IDC analyst says Samsung’s Galaxy Z series has been well-received, and the brand's reputation and marketing efforts contribute to consumer interest in foldable technology.

“As a pioneer of foldable technology in the country, Samsung has collaborated closely with telcos to effectively promote these cutting-edge devices. While Samsung dominates the market, new vendors are poised to launch foldable products, fostering competition that could lower prices and enhance product quality, offering consumers more foldable options.”

According to Jack Leathem, Canalys research analyst, Samsung’s ecosystem portfolio is core to attracting brand switchers in the premium segment and helping Samsung differentiate itself.

“By expanding its portfolio, Samsung will aim to upsell to current customers and have a few eye-catchers to attract new ones. Bringing AI-powered health and fitness features to wearables will be important to differentiate from other ecosystem vendors and smartwatch specialists. The next important step for Samsung will be to elevate its audio and wearable products to independently work as premium products that can drive interest and demand. This sits next to widening its portfolio to meet new target groups.”

Ponela concludes: “The ASP [average selling price] continues to be a significant inhibitor to the overall growth of the foldable smartphone category, with prices remaining considerably higher compared to standard smartphones.

“Foldables command nearly three times the price of non-foldable devices, presenting a considerable challenge in appealing to the average consumer, especially within a developing market such as South Africa.”