June 21, 2024

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Why Samsung Needs Its Foldable Phones to Succeed

Samsung has retained its number one position in the smartphone market for several years in a row. And for a company that has pioneered innovation in the Android space, the title is well deserved. But unknown to many, the tech giant has been losing its grip on the market.

Samsung’s Galaxy S21 series was reportedly the worst-selling one the tech giant has seen in years. Add to that the canceled Note 21 series, and it’s like the perfect recipe for a bad luck cake. To counter this, Samsung is betting hard on the success of the Galaxy Z Fold 3 and Z Flip 3.

Rising Competition From Chinese Manufacturers

In June 2021, Xiaomi surpassed Samsung to become the number one selling smartphone maker worldwide. According to Counterpoint, the Beijing-based giant outcompeted both Samsung and Apple for the first time ever with a record high of 17.1% market share.

Counterpoint-research-Xiaomi-becomes-no-1-smartphone-maker

Image Credit: Counterpoint

Although Samsung still has the throne if you go by the quarter, the odds aren’t in its favor. Chinese smartphone makers like Xiaomi, Oppo, Vivo, and Realme have been consistently strengthening their dominance in some of the biggest markets like China, India, and Europe.

Related: How Are Chinese Android Phones So Cheap?

To give you a little perspective, OnePlus grew by 170% YoY in Q2 2021, Realme by 135%, Xiaomi by 98%, Oppo by 50%, Vivo by 44%, and Apple by 30%. Samsung faced the poorest growth out of all with its modest 7% year-over-year growth.

Samsung Market Share Dips as S21 Series Fails

Samsung is in a bit of a rut. In the first six months of the release of the S21 series, the South Korean giant reportedly sold only 13.5 million units in total. In comparison, the S20 series sold 17 million units and the S10 series sold 25.5 million units.

Q2-2021-Global-smartphone-market-share

So far, Samsung has retained its top spot, but its market share is at risk and has shrunk dramatically from 22% in Q1 2021 to 18% in Q2 2021. To compare, Xiaomi’s market share rose from 14% to 16%—knocking Apple off the second spot from its 17% market share to 15%.

As you can tell, things are not looking good for Samsung. But why? It’s not like the company suddenly started making bad phones. Its S21 lineup is top-notch and the Galaxy S21 Ultra is arguably better than the competition. So what’s wrong?

Samsung Is Facing Supply Chain Constraints

One of the reasons for the failure of the S21 series is Samsung’s compromised supply chain. You see, Samsung manufactures most of its products in Vietnam—which is currently facing a new wave of Covid-19. This caused a disruption in production and distribution.

Vietnam-coronavirus-new-cases

Due to this, there simply weren’t enough Samsung devices in the market available for sale. Hence, the bad numbers. But this is just one of the reasons for the poor sales. Other reasons include the global chip shortage, inferior budget smartphones, and a dip in brand loyalty.

Samsung fans today are more open to buying from other brands in search of better value offerings. On top of that, the S series no longer feels unique enough since mid-range phones these days offer most of the features that flagships do anyway.

How the Z Fold 3 and Z Flip 3 Can Save Samsung

With the launch of the new Galaxy Z Fold 3 and Z Flip 3, Samsung is hoping to gain that market share back with the advantage of being the only major manufacturer of foldable phones so far. But at the same time, the tech giant is sitting on thin ice.

Z-Fold-3-and-Z-Flip-3

Image Credit: Samsung

While Samsung’s semiconductor business is safe for the most part, its mobile division is currently undergoing an internal review to find out the fault in the management. If the Galaxy Z Fold 3 and Z Flip 3 don’t succeed, Samsung could be in big trouble. Luckily, the tides are in Samsung’s favor this time.

While we don’t have much news about the foldable iPhone, we do know that the Android market will see a fair share of new foldable devices very soon from multiple manufacturers, namely Google and Chinese brands like OnePlus, Oppo, and Vivo.

This leaves enough room to assume that foldable phones will be the next big trend in the smartphone industry. This allows Samsung enough leverage to regain and maintain its market share as the first major manufacturer of foldable phones.


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