February 11, 2020 / 12:00 PM / 15 days ago

RPT-Samsung to unveil square-shaped foldable phones to challenge Apple

(Repeats story first published earlier on Tuesday; no change to text)

By Hyunjoo Jin and Heekyong Yang

SEOUL, Feb 11 (Reuters) - Samsung Electronics is set to unveil a new, square-shaped foldable smartphone and updated versions of its flagship Galaxy S range on Tuesday, seeking to revive sales after ceding its smartphone crown to Apple Inc last quarter.

Ahead of the launch event in San Francisco, Samsung in a surprise U.S. TV commercial on Sunday gave a first glimpse of the new square phones that fold like flip phones and show off a notification panel on the exterior.

The Galaxy Z Flip is expected to be cheaper than the bulky $1,980 Galaxy Fold that opens like a book, partly due to a more compact screen size, analysts and sources said.

While the South Korean firm hopes the new handset will help burnish its innovation credentials, consumers will be keen to see whether Samsung has overcome technological challenges and screen glitches that forced it to delay the Galaxy Fold last year.

“Foldables are expensive and very hard to manufacture. It will take time for foldables to become mass-market products,” said Neil Mawston, an analyst at Strategy Analytics, expecting a mass-market takeoff by 2022 or 2023.

“For now, foldables are a super-premium product that can drive profits or a ‘halo effect’ for the Samsung brand.”

Limited foldable display productivity and capacity will constrain Samsung’s ability to boost the foldable phone production sharply, industry officials and analysts say.

Sales are seen at 5 million units at maximum this year, or less than 2% of Samsung’s total smartphone shipments in 2019, a person familiar with the matter told Reuters.

Samsung declined to comment.

Samsung is also expected to launch three variants of Galaxy S premium smartphones, whose sales are expected to exceed that of predecessors, helped by competitive pricing and powerful cameras, researcher Counterpoint said.

Samsung lost its No.1 smartphone position to Apple in the December quarter, according to Strategy Analytics as cheaper iPhone 11 pricing helped the U.S. firm enjoy its best growth performance since 2015.

While China’s coronavirus outbreak has started straining the global supply chain and disrupting smartphone production, the South Korean firm is seen the least affected among major producers, as its main manufacturing base is in Vietnam, analysts said.

Research firm TrendForce forecasts global smartphone production will decrease by 12% in the first quarter to a five-year low but cut its production estimate for Samsung by just 3%.

The Tuesday launch event will also mark first public debut of Samsung’s new mobile chief Roh Tae-moon who previously oversaw the company’s development of S range models and outsourcing of cheap phones to Chinese contract manufacturers. ($1 = 1,183.3000 won) (Reporting by Hyunjoo Jin and Heekyong Yang; Editing by Miyoung Kim and Lincoln Feast.)

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