Samsung Galaxy’s Foldable-Phone Pitch: Just Try Them
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Samsung Galaxy’s Foldable-Phone Pitch: Just Try Them

Company banks on more in-store visits and lower prices.

By JIYOUNG SOHN
Tue, Aug 17, 2021 11:24amGrey Clock 4 min

SEOUL—Samsung Electronics Co. is betting the world is finally ready for its foldable phones.

Consumers had initially balked at a price tag that hovered around $2500. Durability remained a concern. Closed stores during the pandemic meant few buyers could see and touch a foldable phone that looks dramatically different from everything else.

That has brought an underwhelming debut to what had been one of the smartphone industry’s most-hyped products of late. The device has a tablet-size screen that folds in half like a book, becoming small enough to carry in a hand, pocket or purse. When closed, a second display on the outside can field most tasks.

Roh Tae-moon, president of Samsung’s mobile-communications business, said he has heard all the complaints. He is hopeful the company’s two new foldable devices, which were unveiled Wednesday, become more than fringe products in the smartphone market.

“We’ve seen that users who have tried foldable phones like the experience and say they want to use them again,” Mr. Roh said. “But it’s hard to discover the value of foldables if they haven’t had a chance to experience them.”

Samsung’s earlier foldable phone models, first introduced in 2019, weren’t sales hits, industry analysts say. Mr. Roh doesn’t see them as flops: He said they established baseline expectations among consumers and set the ground for this year’s models.

One immediate shift in tactics: a lower price tag. The larger Galaxy Z Fold 3 5G will cost $2499 less than its predecessor. The more compact Galaxy Z Flip 3 5G is priced at $1499.

The foldable phones were among devices unveiled at Samsung’s Wednesday event, which also featured two new versions of its Galaxy Watch—developed in partnership with Alphabet Inc.’s Google—and its Galaxy Buds 2 wireless earphones.

Samsung, the world’s largest smartphone maker by shipments, dominates the foldable category. Just three other companies have rival foldable phones: Huawei Technologies Co., Xiaomi Corp. and Lenovo Group Ltd.’s Motorola.

Two million foldable phones were sold world-wide last year, or about one-quarter of initial projections before the pandemic, according to Strategy Analytics, a market researcher. Shipments of foldable phones this year are forecast to hit seven million units, it said.

That is a sliver of the 1.42 billion smartphones forecast to be shipped in 2021, according to Strategy Analytics. But foldable phones have outsize importance, both as a flashy product that might sway consumers to upgrade their devices and as a profit driver.

If Samsung could sell 10 million foldable phones a year, it would likely generate $1 billion in operating profit—a sum that would be greater than the combined operating profit last year of the global smartphone industry that uses Google’s Android operating system, said Neil Mawston, executive director at Strategy Analytics.

Though Apple Inc.’s iPhone has seen sales soar, the broader smartphone industry could use a breakthrough hit. Worldwide shipments have declined the past three years, according to Strategy Analytics. Global phone shipments will grow 9% this year, though will be roughly the same size as in 2019, according to the company’s forecasts.

Foldable phones were more disproportionately affected by the pandemic than standard ones, industry analysts say. Given their novelty and higher price, foldable phones are products that consumers would prefer to hold in their hands before making the leap, and that became difficult during lockdowns, said Sanjeev Rana, a Seoul-based senior analyst at brokerage CLSA.

“Nobody wants to spend $2,000 looking at a phone on the internet,” Mr. Rana said.

Samsung’s mobile business has a lot riding on the foldable phones becoming a success. The Suwon, South Korea-based company doesn’t plan to release a new version of its plus-size Galaxy Note device this year. Pandemic-induced production issues in Vietnam affected output in recent months, while Covid-19 outbreaks in markets such as India sapped demand. Samsung’s second-quarter mobile profit fell 26% from the previous quarter.

Mr. Roh, 52 years old, has led Samsung’s mobile unit since early last year, after spending decades working in the company’s mobile research-and-development team. Market intelligence shows that people are using their mobile devices more than before the pandemic, he said, and using them to do more types of tasks.

The South Korean company’s foray into foldable phones in 2019 began with controversy. Tech reviewers found structural flaws, including screens that bulged. Samsung delayed the original Galaxy Fold phone by months and fortified the design.

Making the foldable phones sturdier is a selling point for Samsung’s two new releases. A protective film for the main display will improve durability by 80% compared with the previous models, the company says. The devices have gotten thinner and lighter, and come bolstered with stronger frames and hinges. Both are waterproof. Neither has an earphone jack.

The pricier Galaxy Z Fold 3 has a main display that measures 7.6 inches diagonally, with an exterior cover screen of 6.2 inches. When opened, the front-facing cameras are embedded under the display, meaning the circular lenses largely disappear when using the phone. It is compatible with the S Pen stylus, a favorite for Galaxy Note fans, though it must be purchased separately. Apps have been further optimized to provide a better fit on folded screens, Mr. Roh said.

The more compact Galaxy Z Flip 3 has a 6.7-inch main display. The area of the exterior screen, which had previously been a thin bar, is now large enough to support four main apps and enables users to read several lines of notifications and messages without opening the device.

Preorders for Samsung’s newest foldable devices begin Wednesday in the U.S., with the phones hitting shelves Aug. 27 in several markets. Samsung is letting consumers in the U.S. trade in up to four devices, including those from other brands, for discounts that could reduce the price of the Galaxy Z Fold 3 to $1,000 or halve the price of the Galaxy Z Flip 3.

Jene Park, a senior analyst at Counterpoint Research, which tracks smartphone sales, said Samsung’s foldable-phone pricing this year should be more aligned with what consumers expect.

Lee Ji-hoon, a 37-year-old office worker in Seoul, is an early adopter. Last year, he picked up a Galaxy Z Fold 2 and can’t see himself ever going back to a conventional smartphone. He is hooked on the wider screen.

But Mr. Lee acknowledges one drawback, even when the device is closed. “The phone is too bulky to fit in my pants pocket,” he said.



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The Knight Frank Luxury Investment Index reveals investments of passion are paying strong dividends, in some areas at least

By Bronwyn Allen
Tue, Apr 9, 2024 4 min

Art was the investment of passion that gained the most in value in 2023, according to Knight Frank’s Luxury Investment Index (KFLII). This is the second consecutive year that art has risen the most among the 10 popular investments tracked by the index, up 11 percent in 2023 and 29 percent in 2022. Art was followed by 8 percent growth in jewellery, 5 percent growth in watches, 4 percent growth in coins and 2 percent growth in coloured diamonds last year.

The weakest performers were rare whisky bottles, which lost nine percent of their value, classic cars down six percent and designer handbags down four percent. Luxury collectables are typically held by ultra-high-net-worth individuals (UHNWIs) who have a net worth of US$30 million or more. Knight Frank research shows 20 percent of UHNWI investment asset portfolios are allocated to collectables.

In 2023, the KFLII fell for only the second time, with prices down 1 percent on average.

Despite record-breaking individual sales in 2023, a surge in financial market returns contributed to a shift in allocations impacting on luxury asset value,” the report said. “… our assessment reveals a need for an ever more discerning approach from investors, with significant volatility by sub-market.

Sebastian Duthy of AMR said the 2023 art auction year began with notable sales including a record price for a Bronzino piece. But confidence waned as the year went on.

“It was telling that in May, Sotheby’s inserted one of its top Old Master lots – a Rubens’ portrait – into a 20th Century Modern evening sale. But by then, it was clear that the confidence among sellers, set by the previous year’s record-busting figures, was ebbing away. In the same month, modern and contemporary works from the collection of the late financier Gerald Fineberg sold well below pre-auction estimates.”

The value of ultra contemporary or red-chip’ art contracted the most in 2023.

“Works by a growing group of artists born after 1980 have been heavily promoted by mega galleries and auction houses in recent years. With freshly painted works in excess of £100,000 almost doubling in 2022, it was little surprise that this sector was one of the biggest casualties last year. There is a risk there are now simply too many fresh paint artists with none really standing out.”

In the jewellery market, Mr Duthy noted that demand was strongest for coloured gemstones of exceptional quality, iconic signed period jewels, single-owner collections, and items with historic provenance in 2023. In the watches market, Mr Duthy said collectors chased the most iconic and rare timepieces.

A Rolex John Player Special broke the model record when it sold for £2 million at Sotheby’s in May, double the price for a similar example sold at Phillips in 2021,” he said.

Although whisky was the worst-performing collectable in 2023, it has delivered the highest return on investment among the 10 items tracked by the index over the past decade, up 280 percent. Andy Simpson of Simpson Reserved, said 2023 was a challenging year but the best of the best bottles gained 20 percent in value. In my opinion some bottles that lost significant value in 2023 will return through the next two years as they are simply so scarce and, right now at least, so undervalued, Mr Simpson said.

Whisky was the worst performing collectable in 2023 but it had highest return on investment over a 10-year period. Image: Shutterstock

Classic car expert Dietrich Hatlapa said the 6 percent fall in collectable vehicle values in 2023 followed a 22 percent surge in 2022. The strong performance of other investment classes such as equities may have dampened collectors’ appetites it’s a very small market so it only takes a minor change in portfolio allocations to have an effect, and there has also probably been a degree of profit taking. However, we have seen some marques like BMW (up 9 percent in value) and Lamborghini (up 18 percent), which appeal to a younger breed of collector, buck the trend in 2023.”

Mr Duthy said a dip in the share price of the top luxury handbag brands last Autumn appeared to spook investors. Last autumn it was possible to pick up an Hermès white Niloticus Himalaya Birkin in good condition for under £50,000. The recent slide reflects a general correction at the upper end that’s been underway for some time rather than changing attitudes to the harvesting of exotic skins.

According to Knight Frank’s Attitudes Survey, the top five investments of passion among Australian UHNWIs are classic cars, art and wine. Fine wine values gained just 1 percent in 2023 as the market continued its correction, said Nick Martin of Wine Owners. “It’s been a hell of a long run, so I’m not that surprised. Some wines from very small producers that had enjoyed the most exuberant growth have seen the biggest drops. It had got a bit silly, £50 bottles had shot up to £200 or £300.”

Favourite investments of passion: Australia vs Global

1. Classic cars (61 percent of Australian UHNWIs vs 38 percent of global UHNWIs)
2. Art (58 percent vs 48 percent)
3. Wine (48 percent vs 35 percent)
4. Watches (42 percent vs 42 percent)
5. Jewellery (18 percent vs 28 percent)

Best returns among investments of passion (10 years)

1. Whisky 280 percent
2. Wine 146 percent
3. Watches 138 percent
4. Art 105 percent
5. Cars 82 percent

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