Samsung launches its priciest smartphone lineup ever amid chip cost crunch

London/New Delhi: South Korean smartphone and home appliance maker Samsung on Wednesday launched its eighth-generation foldable phones – its most expensive product line so far – amid a global supply chain crisis for electronic raw materials such as memory chips.

The latest foldable lineup includes the Galaxy Z Flip 8, Fold 8, and 8 Ultra. Of these, the passport-shaped Z Fold 8 is a completely new device and the third device in Samsung’s foldable phone series. The Z Fold 8 Ultra replaces last year’s Z Fold 7 and is now thinner and lighter, while the Flip 8 replaces the Flip 7.

Prices of Samsung’s foldable devices have risen due to increases in memory chip prices worldwide. Galaxy Z Fold 8 Ultra is the company’s most expensive smartphone to date. ₹It goes up to 2 lakhs. ₹2.6 lakh for the top version. Z Fold 8, ₹1.8 lakh, costs ₹5,000 more than the Z Fold 7. Z Flip 8, ₹1.25 lakhs, ₹It is 15,000 more expensive than its predecessor.

According to analysts, Samsung currently absorbs most of the price increases in its supply chain with as little as possible passed on to consumers compared to its competitors.

Wednesday’s launch is significant because Samsung’s Z Fold series accounted for 9 out of every 10 foldable phones sold in India last year; This is an industry that generates approximately $900 million in sales for the entire year, according to supply chain analysts.

‘An unprecedented situation’

Sunghoon Moon, Samsung’s executive vice president and a senior manager of its research and development (R&D) office, told reporters at a roundtable held before the launch: “In the nearly 20 years I have been working in this industry, this latest increase in price, not only of memory but also of raw materials in general, is an unprecedented situation that I have never experienced before.”

“As an engineer, my job in this situation is to ensure that this burden is not passed on to consumers while continuing to meet our high standards of quality in our products. As you can all hear, this is seemingly impossible. But all our colleagues at Samsung are doing our best to make it possible,” Moon added.

The launch comes less than two months before Apple, Samsung’s biggest global smartphone rival, is expected to launch the first foldable iPhone this September. It is not yet known whether Apple’s entry into this segment will open up the market, but Samsung is expected to comfortably maintain its leadership at least until the end of 2026.

Still a niche product

While Samsung was the first mainstream global brand to launch a foldable phone, its first attempt in 2019 resulted in durability concerns. Even though it’s been seven years and eight years since the original Galaxy Fold, foldable smartphones have yet to be as affordable or durable as regular smartphones and have therefore failed to break into the mainstream.

Tarun Pathak, research director at market research firm Counterpoint, said foldable smartphones continue to play a very minor role in India’s smartphone ecosystem. “Last year, India sold just 600,000 foldable phones, accounting for about 0.4% of the industry. This year, foldables could grow by 15% due to a small base, while the overall market could shrink by 13%. Even then, foldables will account for just over 0.5% of India’s annual smartphone sales. These still fall within the bounds of those who value the wow factor of a foldable device or business owners accustomed to multitasking capability,” Pathak added.

According to Counterpoint, memory chip prices have more than tripled in the past year due to incessant demand from AI data centers. DuringMintWhile smartphone price increases of up to 40% have previously been reported due to supply chain strain, continued AI consumption means memory costs won’t be dropping anytime soon. As a result, smartphone prices in India have increased by 15% overall compared to last year.

$1,800 worldwide ( ₹1.75 lakh), foldable devices are almost five times more expensive than the average selling price of a regular smartphone in India. “Until this cost rationalizes, foldable phones are unlikely to see any breakthrough,” Counterpoint’s Pathak said.

Despite the high prices, Samsung claims to have solved two other big problems keeping foldable phones on the sidelines by using a new titanium-based material and a new display technology with “barely visible wrinkles” to make the phones thinner and lighter.

foldable financing

Samsung will offer a 30-month zero-interest installment plan to make its new phones more affordable. Aditya Babbar, Samsung India’s vice president of mobile experience, told Mint that the company told customers that “we have reduced the price of the Fold 8 because the monthly EMI (equal monthly installment) has come down by: ₹1,000” with a 30-month financing plan.

Last month, Kailash Lakhyani, founding president of industry body All India Mobile Retailers Association (Aimra), wrote a letter to phone brands on behalf of Indian electronics retailers, urging them to offer 36-month financing plans to ease cost pressure on consumers and increase sales.

India’s smartphone ecosystem has been in a long-running slump. On Wednesday, a retailer report from technology consultancy Techarc and Aimra said nearly half of the country’s more than 1,100 mobile phone retailers believe they may be forced to close shop if the decline in sales continues.

Despite the decline, Samsung’s foldable phone market in India is growing steadily, Babbar said. “For us, this year has shown very healthy growth. In terms of value, it would have been over 30% growth. Adoption of foldable technologies is much faster in Tier II cities and beyond.”

A Counterpoint report dated July 21 said that a total of three million foldable phones have been sold in India since 2019. Samsung is expected to account for 89% of all foldable phone sales in India this year, with Motorola a distant second at 8%.

The author is in London to attend Galaxy Unpacked upon the invitation of Samsung.