Samsung Without Galaxy Note, S21 Performance Also 'Below Expectations'... Rushing FE Launch

[Asia Economy Reporter Seulgina Jo] Samsung Electronics, which declared the "popularization of foldables" and is currently in a kind of flagship transition period, is hastening the launch of the Fan Edition (FE). This comes as the company decided not to release a new Galaxy Note flagship, traditionally launched in the second half of the year, due to the underwhelming performance of the Galaxy S21 series released earlier this year during its initial six months. There is also a sense of crisis that relying solely on the foldable lineup will not be enough to keep pace with China's Xiaomi, which is rapidly catching up in the global smartphone market, and Apple's offensive ahead of the iPhone 13 launch.

◇ Galaxy S21 FE Preparing for Launch

According to industry sources on the 4th, Samsung Electronics is considering advancing the launch date of the Galaxy S21 FE, which had been postponed to the fourth quarter due to semiconductor supply issues. The FE is characterized by having performance and design similar to premium smartphones like the Galaxy S21 but at a significantly lower price.

An industry insider said, "Recently, the production of the Galaxy S21 FE has become smooth, so there is a possibility of a September launch, similar to last year," adding, "The final launch date is expected to be confirmed depending on the atmosphere surrounding the new foldable products this month." This is interpreted as a continuation of last month's confirmation by IT tipster Roland Quandt that "Galaxy S21 FE production has now officially gotten back on track."

Originally, the Galaxy S21 FE was expected to be unveiled alongside foldable phones such as the Galaxy Z Flip3 and Galaxy Z Fold3 at the Unpacked event on the 11th, but it was reportedly delayed due to semiconductor supply issues. Prior to the official launch, it has also recently passed radio certification from China's Ministry of Industry and Information Technology (TENNA).

Especially as the performance of the Galaxy S21 series released earlier this year is estimated to fall short of its predecessor, the role of the FE is becoming even more significant.

According to Kiwoom Securities, the estimated sales volume of the Galaxy S21 series in the first six months after release is 13.5 million units. This represents a 20% and 47% decrease compared to the Galaxy S20 (17 million units) and Galaxy S10 (25.5 million units) series, respectively. Although it achieved early success with an early launch, it failed to maintain momentum thereafter. Kiwoom Securities analyst Ji-san Kim diagnosed, "Flagship sales slumped, and production disruptions due to Vietnam lockdowns contributed to Samsung Electronics' crisis, with market share dropping to 15.7% as of last June."

◇ Samsung's Dilemma: 'What About the Note's Vacancy?'

Moreover, no new Galaxy Note model, a "guaranteed hit card" with cumulative sales around 10 million units per series, will be released in the second half of this year. Meanwhile, Apple, which has secured leadership in the 5G smartphone market, is expecting another record-breaking success with the iPhone 13 this fall. Xiaomi, which rose to second place in the global smartphone market in Q2 and is closely chasing Samsung Electronics, is also aggressively advancing.

Analyst Kim said, "Samsung Electronics is in a transitional phase, reorganizing its flagship lineup by replacing the Note series with foldable phones," adding, "While Samsung's premium brand is at a disadvantage compared to Apple, challenges from the Chinese OVX trio?Oppo, Vivo, and Xiaomi?based on cost-effectiveness (price-to-performance ratio) are intensifying."

The foldable phone market, which Samsung is ambitiously pioneering in response, is still in its early stages. For Samsung Electronics not to lose the global smartphone crown this year, it has no choice but to repeat last year's formula of compensating for flagship sluggishness with the FE. The Galaxy S20 FE, unveiled by Samsung in September last year, was based on the Galaxy S20 series released earlier that year and emphasized cost-effectiveness, selling 2 million units within a month and gaining popularity. Industry insiders expect the Galaxy S21 FE's launch price this year to be even lower than its predecessor.

However, concerns about smartphone profitability are also being raised as the quantitative focus shifts to mid-to-low-end flagships such as the FE and A series during Samsung's flagship transition period to grow the foldable phone market.

Samsung Electronics has also lost leadership and been overtaken in the 5G market, which it entered earlier than Apple. According to global market research firm Counterpoint Research, Apple's market share based on 5G product sales in Q1 was 53%, far ahead of Samsung Electronics' 14%. During this period, 5G smartphones accounted for 69% of the total smartphone market by sales and 39% by shipments. Meanwhile, the foldable phone market led by Samsung accounted for only 0.2% of global smartphone shipments last year.

This content was produced with the assistance of AI translation services.