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Samsung's Galaxy Z Flip expected to sell 3 mln units this year: analysts

All News 10:50 February 12, 2020

By Joo Kyung-don

SEOUL, Feb. 12 (Yonhap) -- Sales of Samsung Electronics Co.'s new foldable phone may be around 3 million units this year, analysts here said Wednesday, as the phone's competitive price and portable design could attract more consumers than its predecessor.

Samsung unveiled the Galaxy Z Flip at its Galaxy Unpacked 2020 event in San Francisco on Tuesday (U.S. time) alongside its new flagship the Galaxy S20 series.

The Galaxy Z Flip is Samsung's second foldable phone after the Galaxy Fold that was launched last year at a price tag of near US$2,000.

Samsung's latest foldable handset bends in half vertically, making it portable enough to fit into a pocket, and costs $1,380.

"It is expected that Samsung can popularize this device with a relatively affordable price and a trendy design that emphasizes portability," Roh Kyoung-tak, an analyst at Eugene Investment & Securities, said. "About 3 million units of the Galaxy Z Flip are expected to be shipped this year and Samsung is estimated to make 650 billion won in operating profit through the Galaxy Z Flip sales."

This photo provided by Samsung Electronics Co. on Feb. 12, 2020, shows the company's Galaxy Z Flip smartphone. (PHOTO NOT FOR SALE) (Yonhap)

Ko Eui-young, an analyst at Hi Investment & Securities, said Samsung's capacity to produce foldable displays could be an issue. He predicted a conservative 2 million in sales for the Galaxy Z Flip, but his estimated figure could change depending on Samsung's production capacity.

The Galaxy Z Flip uses Samsung's first foldable glass display instead of plastic.

"Samsung Display Co.'s foldable display production capacity is estimated at 260,000 units per month, but considering yield rate, it will be around 200,000 units," Ko said. "However, there is a possibility that Samsung Display may expand its foldable display capacity up to 600,000 per month in the first half."

For the Galaxy S20 series, local analysts predicted that it will sell fewer than 40 million units this year, claiming that the Galaxy Z Flip is likely to cannibalize sales of Samsung's flagship smartphones.

This photo taken by Samsung Electronics Co. shows the company's Galaxy Unpacked 2020 event in San Francisco on Feb. 11, 2020. (PHOTO NOT FOR SALE) (Yonhap)

Before the Galaxy S20 smartphones were unveiled, market researcher Counterpoint Research expected that sales of the Galaxy S20 series may be more than 40 million units this year. However, analysts here had different thoughts, expecting annual sales between 33 million and 38 million units for the Galaxy S20 line.

"The retail price of high-end Galaxy S20 model is expected to be similar to that of the Galaxy Z Flip, so it is likely that cannibalization will occur," Kim Dong-won, an analyst at KB Securities, said.

"However, we predict that the combined sales of the Galaxy S20 series and the Galaxy Z Flip will reach 37 million units, which is more than 6 percent higher than the average Galaxy S series sales in the past three years."

Analysts predicted that launch of new smartphones is likely to push up Samsung's profitability this year.

Samsung's mobile business saw its operating profit fall 8.8 percent on-year to 9.27 trillion won (US$7.8 billion) in 2019, its worst since 2011.

"Samsung appears to be focusing on increasing the average sales price of its mobile products to improve its revenue and profit," said Park Kang-ho, an analyst at Daishin Securities. "Based on its competitiveness in small sized OLED displays, it will try to expand and preoccupy the foldable phone market."

kdon@yna.co.kr
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