Samsung – Optimistic Origami

Folding devices to offset the ravages of commoditisation.

• The announcement of a device with a truly flexible screen looks to have been perfectly timed as Samsung is starting to run out of hardware differentiation in its Galaxy handset line-up.
• The idea of a device with a flexible screen has been around for more than 7 years (see here) and as far back 2012 both Samsung and LG demonstrated fully flexible, almost indestructible displays.
• The problem has been two-fold:
  • First, yield: The encapsulation of a flexible display has proved to be tricky at scale and yields have been so low that the devices would have been too expensive and too unreliable for the market.
  • I believe that this problem was largely solved some time ago but still Samsung has declined to launch devices.
  • I suspect that this was because it did not need to, given that it still had hardware differentiation in other display features (see below).
  • Second, demand: Samsung has been struggling to work out what these displays add to the user experience and has come up blank.
  • Likewise, many of its handset customers have been of the same opinion, as Samsung met with no real demand when trying to sell these screens to other handset makers.
  • I have long been a believer in flexible displays because it is well known that pointless but cool gimmicks sell devices and, at the moment, a flexible display is exactly that.
• However, since the time that perfected mass manufacturing, it has led the market in large screen devices (a segment it created and where Apple has followed), in OLED and in bezel-less displays.
• Samsung has been ahead of all of its competitors on each of these innovations which has given it the ability to maintain share at the high-end as well as leverage its scale.
• Its success in these three areas has also helped its brand which emerged pretty much untarnished from the Note 7 battery fire fiasco.
• Consequently, it had no need to launch a new hardware feature as its other features were working perfectly well.
• However, the problem is that hardware differentiation does not last forever and now that Apple and the Chinese have pretty much caught up on large, bezel-less OLED displays, it needs something new to keep its edge.
• This could explain the timing of finally productising a flexible display as I am pretty sure that it will be the only device in the market with this feature for some time to come.
• Market reception is uncertain but given Samsung’s ability to make things smaller, better and cheaper than almost anyone else, I am confident that it will be a sleek, nice looking device.
• The big question, of course, is price and this device is unlikely to be cheap but what Samsung will be looking for will be a halo effect from its hero product to energize the appeal of its other devices.
• Hence, I see this launch as the next stage in Samsung’s quest to maintain hardware differentiation in the face of the relentless commoditisation of Android smartphones.
• Given that Samsung perfected this some time ago, I think that it has been holding onto this feature until all of its other innovations had exhausted their uniqueness.
• This combined with the slowdown in the smartphone market resulting in tougher competition makes 2019 an ideal time to launch this feature.
• The one unknown is how aspirational this feature will prove to be as it adds far less to the user experience than a larger screen and better-quality visuals.
• I think that if Samsung makes it cool enough, it will drive yet another round of screen innovation keeping Samsung comfortably at the top for at least one more cycle.
• Samsung is not the cheap stock that it once was, but it is not that expensive either making it one I am happy to own but not a must-have.