First Time in Korea
Samsung Electronics is expected to hold its new smartphone model unpacking event in Korea. The company is speeding up the diversification of its Asian strategy amid a U.S.-China trade conflict and sluggish demand for information technology (IT) products in China, which has led to a companywide decline in exports to China.
According to sources in the IT industry on July 21, Samsung Electronics will move the unpacking of the Galaxy Z Fold 5 and Galaxy Z Flip 5 to July 26 at the earliest, instead of the usual second week of August. While Samsung Electronics posted an earnings shock in the first quarter due to a large loss in its semiconductor division, the company needs a quick launch of a new smartphone model to generate effects of improving earnings by faring well in its mobile business.
Industry insiders’ attention will be focused on whether the unpack event can be held in Korea for the first time. Unpack events have previously been held mainly in New York and San Francisco. Samsung Electronics officially said that the date and venue were not finalized yet, but Seoul and Busan are emerging as possible locations.
Some industry observers say that Samsung Electronics judged that it will be effective to move the Unpack Event to Korea to emphasize its dominance in the foldable phone market, which is heating up after the launch of Google's new foldable phone, the Pixel Fold. Samsung Electronics is targeting non-Chinese Asian countries such as Indonesia, Vietnam, and India as emerging new markets that will replace the Chinese smartphone market.
The Indian smartphone market, the world's second largest after China, is growing at a rapid pace, with a compound annual growth rate expected to reach 8 percent in 2027. The Android operating system (OS) has a 95 percent market share in India, making India a friendly market for Samsung. The recent worsening of anti-China sentiment among the Indian people due to India’s border disputes with China can also serve as a favorable factor for Samsung in the Indian smartphone market. In the four major Southeast Asian countries of the Philippines, Thailand, Indonesia, and Vietnam, combined smartphone shipments fell by 7 percent year on year as of October 2022, while Samsung's smartphone shipments increased by 1 percent.
On the other hand, an outlook for smartphone sales in China is not so bright due to a slowdown in the Chinese smartphone market. According to market research firm Counterpoint Research, overall smartphone sales in China fell 12 percent in the first six weeks of the year, and shipments are expected to decline on an annualized basis. When breaking down the first six weeks of the year by vendor, Huawei was the only one to enjoy sales growth, with its sales up 44 percent year over year, while other major players saw their sales decline, including Apple (down by 20 percent), Vivo (down by 15 percent), Honor (down by 7 percent), Oppo (down by 14 percent), and Xiaomi (down by 20 percent).
Huawei is unique in that its 4G phones account for more than 90 percent of its sales, as U.S. sanctions have limited its supply of 5G mobile phone semiconductors. In the Chinese market, where the 5G use ratio is high, it will be difficult for Huawei to defend its market share in the long run. But experts say it will be difficult for Samsung to replace Huawei in the Chinese market already dominated by Apple and Chinese manufacturers.
Meanwhile, Samsung’s rival Apple is focusing more on the premium smartphone market in Southeast Asia than in mainland China, where it faces stiff competition with Chinese brands. Apple recently announced the opening of its online store in Vietnam, emphasizing the personalized shopping experience of buying iPhones directly from Apple's website. Sales of Apple's flagship smartphones grew by 32 percent in Southeast Asia in 2022.