Samsung Readies Phone With Foldable Screen -- WSJ

Smartphone maker prepares limited rollout of premium device early next year

By Timothy W. Martin 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 19, 2018).

SEOUL -- Samsung Electronics Co. is planning to introduce a foldable-screen smartphone early next year, according to people familiar with the matter, as the world's largest phone maker eyes a splashy device to help re-energize its slumping handset business.

The Samsung prototype, which bears the internal code name "Winner," features a screen that measures about 7 inches diagonally, roughly the size of a smaller tablet, these people said.

The screen can be folded in half, like a wallet, these people said. When the phone is folded, its exterior shows a small display bar on one side and cameras on the other, they said.

A foldable-screen device has long been a hotly rumored industry pursuit, with several phone makers said to be developing models. Unlike a traditional flip phone, the device when opened would be almost all screen, giving consumers a large display akin to a tablet, with the portability of a phone that could fit in a consumer's hand, pocket or purse.

Other manufacturers have launched smartphones that fold, but those devices used two screens connected at their phone frames.

The new Samsung design -- using a foldable screen -- could help rejuvenate a handset industry that has struggled to find new dazzling features to impress consumers.

Smartphone sales declined 0.3% in 2017, the first annual decline in the industry's history, according to IDC, a market researcher. They are projected to dip again this year, by 0.2%, IDC says.

A Samsung spokeswoman declined to comment.

The foldable-screen phone would create an entirely new product category and become Samsung's third flagship device, alongside its primary Galaxy S and large-size Galaxy Note lineups, several of the people say.

The initial rollout would be on a smaller scale, targeting specific markets like mobile gamers. If successful, it would pave the way for a broader commercial debut in the second half of 2019, these people say.

That follows a playbook that Samsung has used in the past, most notably with curved-screen smartphones, which it first released in limited quantities in 2014 before rolling them out to the mass market.

The device wouldn't be expected to be a big seller right away, according to people familiar with the matter. But Samsung wants to be the first company to produce a foldable-screen phone, which could be the most significant leap in smartphones in several years, they say.

The timing and final design could still change, though the project has assumed greater urgency in recent months, with senior Samsung executives making it one of the company's top priorities, the people say.

Another factor behind Samsung's push: a falloff in premium-phone demand this year, especially for the company's latest flagship device, the Galaxy S9 -- which surprised some Samsung mobile executives, according to several of the people. The Galaxy S9's sales drop-off from the prior year's model could be 20% or more, industry analysts say.

The South Korean company earlier this month forecast a lower-than-expected operating profit for the second quarter, largely driven by the decline in Galaxy S9 sales.

Samsung has been working on a foldable-screen phone for years, with the project previously code-named "Valley." The company has acknowledged such a device is on its product road map, though it has never noted a firm release date or design specifics.

The company does have a leg up on its rivals: the key technology that makes the foldable screen possible -- the organic light-emitting diode, or OLED, display -- is made by a Samsung division. Samsung currently controls nearly all of the smartphone OLED market.

But the new phone would face challenges. Because it would be deploying a large interior screen, plus a second smaller one -- the display bar -- on the outside, the device would require a bigger battery, and that has stirred concerns inside the company over potential overheating, according to people familiar with the matter. The device would also require more powerful components, such as chips, driving up costs.

The phone's price tag could easily surpass $1,500, according to people familiar with the matter. Consumers have already balked at paying more than $1,000 for the newest high-end devices, though Samsung apparently is betting that the phone's novelty would be enough to win over some premium users.

Separately, Samsung is closer to releasing another much-anticipated piece of hardware: a voice-activated speaker powered by its Bixby digital assistant, according to people familiar with the matter.

The speaker is expected to retail for about $300 and should debut in the next month or so, the people said. Its release will likely track closely with the Galaxy Note 9, which will be unveiled Aug. 9 in New York, with the large-screen smartphone arriving in stores shortly thereafter, they said.

The speaker -- code-named "Lux" -- is bowl-shaped, with a legged bottom and lights at the top, one of the people said. It will be marketed as a high-end music player, boasting features like sound shifting, in which the speaker's audio can be beamed in the direction of a person providing verbal commands, the person said.

Write to Timothy W. Martin at [e-mail]

(END) Dow Jones Newswires

July 19, 2018 02:47 ET (06:47 GMT)

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