Samsung launches wider foldable phone amid rising chip costs

Samsung Electronics on Wednesday unveiled a passport-sized foldable phone and raised prices of two updated foldable models, as it grapples with rising memory chip prices while bracing for a new threat from Apple in the niche but growing segment.

The South Korean technology company 005930.KS pioneered foldable smartphones but its dominance is set to be challenged by Apple AAPL.O which analysts expect this year to launch a foldable phone with a screen similar in size to an iPad mini.

"Strategically, this is one of Samsung's most important foldable launches," said Francisco Jeronimo, vice president at researcher IDC. "Samsung has to defend the category it created, and that's why it cannot play it safe."

Samsung unveiled the three Galaxy Z foldable models powered by Alphabet's GOOGL.O Gemini artificial intelligence at an event in London.

It priced its passport-sized Galaxy Z Fold8, featuring a wider screen aimed at video-heavy users, at $1,899. It raised its premium Galaxy Z Fold8 Ultra and clamshell-style Flip8 by $100 from their predecessors to $2,099 and $1,199 respectively.

Samsung is likely to increase its global smartphone market share in 2026 though the overall market is set to contract a record 14% due partly to a memory chip shortage, IDC forecast. Foldable shipments, on the other hand, are likely to grow 20%, IDC said.

Some analysts expect Samsung's mobile division to post its first-ever quarterly loss in April-June as surging chip prices squeeze profit margins, even as they fatten margins at Samsung's semiconductor business to record highs.

Memory and storage account for more than 60% of material costs in budget smartphones and more than 30% in premium models, Omdia data showed.

"Memory is a much smaller share of the bill of materials on a device above $1,500 than on a mid-range phone, so there is more room to absorb (higher chip prices) at the top-end," said Omdia senior analyst Sheng Win Chow.

"The harder question is what justifies the price. A bigger screen alone is no longer enough," he said.

In terms of processing power, the Fold8 and Fold8 Ultra use the latest processor from Qualcomm QCOM.O while the Flip8 uses a Qualcomm chip or Samsung's Exynos chip depending on market.

-Reporting by Hyunjoo Jin; Editing by Miyoung Kim and Christopher Cushing/Reuters