Samsung's Strategic Shift: New Foldable Phones Challenge Chinese Rivals

On July 9, 2025, Samsung Electronics unveiled a new line of thinner and lighter foldable smartphones in an effort to reclaim its competitiveness in the premium smartphone market, which has been increasingly dominated by Chinese companies such as Huawei and Honor. This latest launch comes on the heels of Samsung losing its status as the world's leading smartphone manufacturer to Apple in 2023, highlighting the intense competition in the high-end mobile device sector.

The newly introduced Galaxy Z Fold 7 and Galaxy Z Flip 7 FE are designed to address previous criticisms regarding the bulkiness of foldable phones, as they are now 10 percent lighter and 26 percent thinner than their predecessors. Samsung's mobile president and chief operating officer, Choi Won-joon, emphasized the company's commitment to integrating artificial intelligence (AI) technology in their devices, stating, "I believe that foldable phones, integrated with AI features, are ready to become mainstream by offering unique, differentiated experiences" (Reuters, 2025).

This move is part of Samsung's broader strategy to focus on premium products, especially as U.S. tariffs threaten to increase production costs and suppress consumer demand. The price for the Galaxy Z Fold 7 has risen by 5 percent to $1,999, while the Galaxy Z Flip 7 FE is priced at $899, aiming to attract a more budget-conscious segment while maintaining a premium image.

According to Canalys, Samsung's foldable smartphones currently represent 4 percent of the company's total phone sales but account for a significant 16 percent of sales in the segment priced over $800. Despite these figures, industry analysts remain skeptical about the growth of the foldable market, which constitutes only 1.5 percent of the total smartphone market, as indicated by data from IDC. Canalys predicts that Samsung's foldable shipments, which peaked in 2022, are likely to remain flat or slightly decline in 2025, mirroring the overall stagnation in the smartphone market.

Choi acknowledged the rising competition from Chinese manufacturers and indicated that Samsung is doubling down on its efforts in the U.S., European, and South Korean markets. The company has also been proactive in addressing supply chain challenges, particularly concerning rare earth materials, which are crucial for smartphone production. Samsung is diversifying its supplier base and boosting its internal stockpiles to mitigate risks associated with export restrictions from China.

While Samsung's foldable phones have been recognized for their innovative design, the high prices and limited use cases continue to pose significant barriers to widespread adoption. The company's strategy to enhance AI capabilities, especially through partnerships with companies like Google, may provide a competitive edge over Apple, which has relied on in-house AI technology that has faced delays in deployment.

In summary, Samsung's introduction of its new foldable smartphones marks a critical moment in its efforts to regain market leadership amid fierce competition from Chinese rivals. While the potential for growth in the foldable segment remains uncertain, the company is positioning itself for future challenges by leveraging AI technology and enhancing its product offerings in key global markets.