Samsung's Foldable Phone Shipments Expected to Decline: Can AI Be a New Growth Driver?

Samsung's Foldable Phone Shipments Expected to Decline: Can AI Be a New Growth Driver?According to a recent market investment brief released by renowned analyst Ming-Chi Kuo, pre-orders for Samsung's Galaxy Z Fold6 and Galaxy Z Flip6, slated for release in July, have declined by 10% year-over-year, despite the emphasis on AI features. He anticipates Samsung's foldable phone shipments to reach 8-9 million units in 2024, slightly lower than the previous year

Samsung's Foldable Phone Shipments Expected to Decline: Can AI Be a New Growth Driver?

According to a recent market investment brief released by renowned analyst Ming-Chi Kuo, pre-orders for Samsung's Galaxy Z Fold6 and Galaxy Z Flip6, slated for release in July, have declined by 10% year-over-year, despite the emphasis on AI features. He anticipates Samsung's foldable phone shipments to reach 8-9 million units in 2024, slightly lower than the previous year.

Kuo further notes that while the Samsung S24 series witnessed initial demand exceeding expectations, sales momentum began to slow down from April onwards. He argues that despite Samsung's focus on AI capabilities in its new foldable phones, the decline in pre-orders suggests a lack of enthusiasm among consumers for AI applications in smartphones.

Can AI Be a New Growth Driver for Smartphones?

In recent years, smartphone brands have heavily invested in AI services, aiming to enhance user experience and drive upgrades. However, there is currently no clear evidence to support the notion that improved on-device AI services from Google and Samsung, among others, can truly stimulate a surge in upgrades.

This is particularly evident in the case of foldable phones, where shipments have fallen short of expectations, indicating that consumers have not perceived a significant improvement in user experience. This situation suggests that foldable phones may face limited growth potential in the near future.

Market Expectations and Risks

While some market participants remain optimistic about the potential of on-device AI to drive dramatic growth in smartphones and computers, Kuo believes that if the iPhone 16 series fails to meet sales expectations upon release in the second half of this year, despite relying on AppleIntelligence, the aforementioned optimism may be revised, leading to potential short-term downside risk for related stocks.

Conclusion

Currently, AI as a selling point for smartphones has yet to demonstrate sufficient appeal to effectively drive market growth. This is especially true for foldable phones, where their high price and limited improvements in user experience restrict their growth potential.

In the future, smartphone manufacturers need to prioritize meeting real user needs, continuously refining product functionality and enhancing user experience to truly seize market opportunities and achieve sustainable growth.