Samsung commercialized foldable phones at a very turbulent time. The original Galaxy Z Flip can be considered its first commercial product in this category, as the first Galaxy Fold was more of a proof of concept and it had a few stumbles out of the gate.
Samsung unveiled the first Galaxy Z Flip in February 2020 at an event in San Francisco. The flip phone went on sale soon after to a decent market response. A few weeks later, the world literally shut down due to the pandemic.
With so much uncertainty around health, jobs, income and if there would ever be a post-pandemic reality, you can imagine that buying a new phone wasn't on the list of priorities for most people. The smartphone demand fell considerably, with the fall being most drastic in the high-end segment.
The world started reopening gradually by the following year and despite all of the supply chain challenges, Samsung had already launched the Galaxy Z Fold 2 by then and has since released a new iteration of both foldable phones every year. The foldables were supposed to be a significant driver of growth for Samsung's smartphone lineup, since it was grappling with stagnant demand in the flagship segment.
It was a big gamble for the company, one for which it had sacrificed the highly popular Galaxy Note series. Samsung saw rapid growth initially. Just over two years after the foldables were first launched, it confirmed in July 2022 that more than 10 million Galaxy foldable phones combined had been shipped over the past year alone.
Samsung's ambitious foldable shipment targets have not materialized
That's also when Samsung's mobile division boss TM Roh shared that the company wanted foldable smartphone sales to make up 50% of its flagship Galaxy smartphone sales by 2025. A prediction made in 2022 for sales by 2025 might have seemed like it was way off in the distance, but in case you haven't noticed, we're about a week from 2025.
Samsung hasn't been able to hit this target so far. And it appears the company isn't confident about a significant increase for foldable smartphone shipments with the 2025 models. To put things in perspective, shipments of the entire Galaxy S24 series are expected to be around 30 million units, so the foldables would need to hit at least 15 million.
Shipments for the entire foldable smartphone market were at 15.9 million units in 2023. This includes devices from other players in the market such as Xiaomi, Motorola, Huawei, and Oppo who have all made cheaper, and in some cases, better-equipped foldables.
While overall shipments are expected to hit nearly 18 million units in 2024, these phones still account for less than 2% of the total smartphone market. There's evidently been no rush from customers to switch over.
Samsung was initially confident about the prospects for its Galaxy Z Fold and Galaxy Z Flip devices coming into this year, as it expected shipments to hit 20 million in 2024. However, all players combined have only managed to hit 18 million units shipped for this year. Even if you were to give Samsung the dominant 60% share, that means its foldable phones moved almost 11 million units, far short of the company's 15 million goal.
Samsung's flagship phones are still a hit, just not the folding kind
The rumors that are coming up now suggest that Samsung won't just miss Roh's target. The total number of shipments could go down as well. Samsung has reportedly cut the Galaxy Z Flip 7's production target to 3 million units from the Galaxy Z Flip 6's 4.2 million unit target and the Galaxy Z Fold 7's production target to 2 million units.
If these figures are accurate, Samsung is reducing its production target for next year's foldable phones by a whopping 39%. Even if all of those units end up selling to customers and the company's previous models bring in some sales as well, it's difficult to see a scenario where Samsung doesn't end up with fewer overall shipments in 2025.
It's not that Samsung's phones have fallen out of favor with customers. While it's cutting production targets for the foldables, it's raising them for the Galaxy S25 series. The company projects a 10% gain with 37.4 million units compared to 35 million for the entire Galaxy S24 series. The problem isn't that people don't want its flagship phones, the problem is that they don't want its foldable phones enough.
It was the early adapters and tech enthusiasts who drove the initial success of foldables. Most have stuck around and even upgrade yearly. But some may have moved to other brands or gone back to the Galaxy S series. Others may find the generational improvements too incremental to warrant yearly upgrades.
Relatively minor yearly upgrades and lack of meaningful collaborations haven't helped
Repeat buyers also feel that Samsung isn't properly addressing the shortcomings they have highlighted, such as the lack of major camera upgrades. You can't get Samsung's best mobile camera experience even if you spend $1,800 on its most expensive smartphone. That just doesn't sit right with a lot of customers.
We also haven't seen any meaningful partnerships and collaborations that could have pushed the foldable lineup to a whole new segment of buyers. For example, the Galaxy Z Flip's association with Thom Browne was brief and didn't evolve into much else. The Galaxy Z Fold could have worked effectively as an enterprise device, but there's little to show for on the B2B front as well.
Perhaps that's why Samsung is now expanding its foldable lineup to offer more and potentially cheaper options. The Galaxy Z Fold Special Edition just came out recently, and the company could launch a more affordable Galaxy Z Flip FE next year. Will that be good enough? Only time will tell.
