Foldable Phones and Innovation Marketing

As companies like Samsung and Huawei announce foldable smartphones, the tone of the critics has been interesting to observe. A lot of commentaries, particularly on Twitter, has been quite critical of both devices with pundits being quick to point out their flaws. I feel the quick critique, and overall negativity by many pundits misses an important perspective.

The positioning of Samsung and Huawei of their foldable devices into the ultra high-end and genuinely out of the price range of 99% of consumers is both tactical and telling. None of these devices are mainstream products and both Samsung and Huawei know this and have been intentional in making sure it isn’t a mainstream product.

The question that has been asked is whether or not these foldable phones should even have been announced or even come to market. It is a valid question since these devices will not sell in any volume and are just the beginning of a new innovation cycle of foldable smartphones. The broader point that I think needs to sink in is that being first with a foldable product will bring about benefits to both Samsung, Huawei, and others who release this year from a marketing and branding standpoint.

The Case for Being First
There is a lot to unpack when it comes to the idea of first moving innovation. Being first does not always guarantee success as we have dozens of examples of products that were innovative that were simply too early and being too early is often as bad as being too late. But when on the cusp of a new product cycle or trend being first can have its benefits and rewards.

In some ways, there are parallels to the big screen TV race with HDTV and new technology like OLED and Plasma. For years some of the hardest problems for TV/display companies was to increase the size of TV displays with new technology like OLED and Plasma. For years, I remember industry debates asking questions about whether or not things like OLED could even get to 50-inches. But each year, TV companies brought out the biggest, highest resolution, and technology loaded TVs they could. These were nearly always simply a technology demonstration. Yes they had a price, and it was astronomical, but these companies needed to challenge their engineers and prove they could overcome hard challenges as they push the envelope with display technology.

What flew under the radar was how these technology showcases served as good marketing for TV companies. Consumers would never for a second believe they would buy a 100-inch OLED TV from LG for north of 10,000 dollars but the sheer existence, and heavily talked about product by news/media/etc., would help lend credibility to LG as a technology leader in TVs. The hope from LG in doing a technology showcase like this is not that consumers would buy the $10,000 TV but that their demonstrated leadership would help sway consumers to consider any LG TV.

Samsung and Huawei’s foldable strategy is very similar to the example above. They are priced out of the mass market on purpose, and they are priced to sell thousands not millions. The goal is not to sell this product in masse but to hope that being first with something consumers pay attention to and take note of, benefits their brand and other products as they demonstrate technology leadership.

Something that has been bouncing around my mind is the overall impact, if any, to Apple’s perception as an innovator. Most people know Apple is rarely, generally never, first to anything. Apple’s motto is not first but best, and they have executed this well. But what is interesting is your average consumer doesn’t know this. Your average consumer often thinks Apple is first, or at least not late, to anything. I’d bet if you ask most consumers they would think Apple was first with MP3 players, and I wouldn’t be shocked if many thought Apple was first with smartphones. We know this isn’t true, but because Apple does the best job making new technologies mainstream, most consumers associate Apple as a leader in this regard.

Interestingly, with foldables, Apple is very clearly not first in perhaps a new way. When Apple inevitably releases a foldable iPhone, consumers will undeniably know Apple was not first with this technology and followed instead of led. This likely won’t hurt sales of any Apple product but what bounces around in my mind is what impact, if any, this has to the brand perception Apple has as an innovator.

To be clear, I’m not advocating Apple should have released a foldable well before it is ready, only that I’ve personally been surprised how many average consumers in my friends and family circle have seen the foldable from Samsung and Huawei in the news and thought it was very cool.

Within this framework, I maintain these devices are working from a marketing standpoint. Yes they serve as strategic ambitions for many companies who need to learn hard lessons and overcome hard challenges by working to bring a foldable to market, but the bigger picture viewpoint that intrigues me is how this particular trend can help these brands from a marketing standpoint, not just in the short term but in the long-term as well.

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

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