The Samsung Galaxy Fold Captured Attention, but The Galaxy S10 Lineup Will Capture Sales

Samsung celebrates ten years of Galaxy S and technology is not the only thing that has evolved over this time period. The user base has evolved too. The Galaxy S started as a single product aimed at the higher end of the market. At the time Samsung had a portfolio that counted tens of products aimed at different price points and regions. Thanks to carrier subsidies the Galaxy S spread from early tech adopters to a much broader addressable market of users who wanted the latest and the best and could now afford it. Fast forward to today, and Samsung is faced having an installed base of Galaxy S users who are not as homogeneous as you think. In a way, this is not that different from the problem Apple is facing. The three new Galaxy S10 models introduced at #Unpacked2019 in San Francisco are aiming to address exactly this diversity in the user base.

Samsung had different flavors of Galaxy S since introducing the Galaxy S Edge, but there was limited differentiation in features beyond screen size and price. The Galaxy S10 S10+ and S10e are all addressing different technology needs and budgets without compromising on the high-end experience that a Galaxy S user is looking for. While some might see multiple products as confusing for buyers or as a lack of focus, I think of it differently. Once in a store, price, color, and tech specs will take buyers to their optimal product. As far as focus, considering how replacement cycles are lengthening and consumers are considering pricing more carefully offering choice is a plus, not a minus.

Throwing 5G in the Mix

Aside from the three main Galaxy S10 models, Samsung also announced the new Galaxy S10 5G powered by the Qualcomm Snapdragon 855 combines with the Snapdragon X50 modem. Jumping on 5G early in the cycle brings some challenges. First and for most is the fact that carriers more than brands are the ones picking launch schedules and availability. Samsung showed clear support from carriers in different regions, which of course was not a surprise, given Samsung’s position in the market. In the US the Galaxy S10 5G will launch with Verizon in Q2.

I really appreciated the way Samsung talked about the Galaxy S10 5G. The focus was on the experience the phone delivers thanks to a thoughtful choice of specifications and 5G. Connectivity per se has never sold, and it is no different for 5G. With the Galaxy S10 5G, Samsung is selling you a 5G experience, not a 5G connectivity. As nuanced as this might seem, it will make the difference between an aspirational product for users who are not tech savvy and one that would otherwise only appeal to those who care about speeds and feeds. The potential of seamless online gaming, AR experiences, video streaming and more come together through design choices, features, and connectivity.

The Promise of Foldable

The Galaxy Fold stole the show with the promise of what smartphones can be in a non-distant future – the launch date is set for April. Samsung was brilliant in positioning the Galaxy Fold as a luxury device for now. It was smart not because it reflects the $1980 price point, but because the Galaxy Fold is certainly not a device for the masses. There is a lot of technology packed into the device, including many firsts, which justifies the price but differentiated use cases are still to be defined. Furthermore, purposefully designed apps taking advantage of the two screens through app continuity still need to be built. Early tech adopters have a higher degree of patience in finding the quirks and learning what a new category can do, so they are a prime target. Consumers who want a device that delivers status will also be interested in the Galaxy Fold.

We will see if the Galaxy Fold is a one-off or the start of a new category and much of this will depend on what Android and app developers will make possible. We know there will be more foldable showcased at MWC in just a few days and what I am interested in seeing is the design approach vendors will take. Overall, I think foldable phones have a more significant opportunity than 2in1 had in the PC market. Phones, unlike PCs, are always with us and while I argued many times that consumers have little left to give to Android tablets – both in terms of time and money – they will still benefit from a tablet-like experience from the device that is always with them.

Has Samsung Done Enough?

This is the question I always get at the end of a launch event: has company X done enough? This time, the question is actually multifaceted so let’s break it down:

Has Samsung done enough to see sales growth year over year?

Possibly. I think overall this year’s Galaxy S10 portfolio has a broader and stronger appeal than the last two years. The different price points and the new designs around key features such as the Infinity O Display, the three-camera system, and the ultrasonic fingerprint scanner will undoubtedly capture the interest of early tech adopters as well as consumers who want their new purchase to stand out from the past models. Bundling the new Galaxy Buds in preorders for the Galaxy S10 and S10+ is a good incentive too but also a smart move to create more stickiness for valuable customers.

Has Samsung done enough to change the trajectory of the smartphone market?

Um, no and nobody else will. This is the new normal. The smartphone market will not see the kind of year over year growth we had been accustomed to. 5G could potentially help in a couple of years as price points lower, and availability expands, but even that might not see growth rates similar to the transition to 3G and 4G. This is not because 5G is not important, but because it is incremental when it comes to phones and it will be other devices that will deliver on experiences, we did not even think were possible. Consumers might end up, therefore, sharing their budget more than they did during the rise of smartphones. The 3G rollout also coincided with the start of the smartphone market and app stores while 4G coincided with smartphones becoming more affordable. In both cases you had two strong trends joining forces in creating a buzz for consumers.

Has Samsung done enough to hold on to its market leadership?

Early to say as this battle will not be won with a strong Galaxy S10 line up only. The Galaxy S10 models will certainly help in mature markets, but in emerging markets and the prepaid segment of mature markets, it will be the Galaxy A Series that will help Samsung hold or gain share. While it is possible for Huawei to get to the number one spot in the world without playing a meaningful role in the US smartphone market, I am not convinced the Chinese brand would be able to sustain that position long term. Being an early mover with 5G might help Samsung in China, a market where Samsung used to be number one but where the brand has lost traction among consumers who saw local household name being more responsive in addressing their specific needs.

I was encouraged by how Samsung continues to pay more and more attention to overall experiences rather than delivering a string of features. The partnership with Instagram for a camera mode and with Adobe for on-device video editing show not just the ability to bring other brands to the ecosystem but a higher degree of attention to make things easier for users. This, combined with more obvious examples of different devices working together to deliver more value is what will ultimately start to matter more and more to users. Apple owns this model and was able to build a loyal user base that invests across devices and services. Samsung has more work to do, but it is certainly showing more promise than Huawei, which will make a difference particularly in more mature markets. Huawei could, of course, embrace stock Android, but I am not sure they are quite ready to do that especially considering the current political climate and the risk that such a move might bring if they were suddenly shut off.

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Carolina Milanesi

Carolina is a Principal Analyst at Creative Strategies, Inc, a market intelligence and strategy consulting firm based in Silicon Valley and recognized as one of the premier sources of quantitative and qualitative research and insights in tech. At Creative Strategies, Carolina focuses on consumer tech across the board. From hardware to services, she analyzes today to help predict and shape tomorrow. In her prior role as Chief of Research at Kantar Worldpanel ComTech, she drove thought leadership research by marrying her deep understanding of global market dynamics with the wealth of data coming from ComTech’s longitudinal studies on smartphones and tablets. Prior to her ComTech role, Carolina spent 14 years at Gartner, most recently as their Consumer Devices Research VP and Agenda Manager. In this role, she led the forecast and market share teams on smartphones, tablets, and PCs. She spent most of her time advising clients from VC firms, to technology providers, to traditional enterprise clients. Carolina is often quoted as an industry expert and commentator in publications such as The Financial Times, Bloomberg, The New York Times and The Wall Street Journal. She regularly appears on BBC, Bloomberg TV, Fox, NBC News and other networks. Her Twitter account was recently listed in the “101 accounts to follow to make Twitter more interesting” by Wired Italy.

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