PEELING PROBLEM
Samsung is investigating broken Galaxy Folds after reviewers peeled off the top layer of the screen, thinking it was a protective cover,
Samsung Electronics Co. said it would investigate the causes behind malfunctioning Galaxy Fold phones issued to tech reviewers, casting doubts over the rollout of the industry’s first mainstream foldablescreen device.
Samsung, despite multiple tech reviewers reporting problems, pledged to make the Galaxy Fold device available April 26 in the U.S., stating there was “no change” to the release, according to a company spokeswoman.
Some tech reviewers encountered problems after unknowingly peeling off the top layer of the Galaxy Fold’s display—effectively tearing off part of the phone’s screen—believing it had been a protective cover. Other outlets, which hadn’t removed any part of the display, also reported issues related to hinges or flickering screens. Some tech reviewers didn’t encounter problems.
Samsung didn’t specify how many test units had problems. The company said a “limited number” had been affected and that it “will thoroughly inspect these units in person to determine the cause of the matter.”
The product headache comes at a crucial time for the world’s largest smartphone maker. Samsung has lost some technological dazzle to lower-cost Chinese rivals and had hoped the Galaxy Fold’s unique design would help it re-energize its sales. The absence of major hardware or software advances has added pressure on the broader industry as people hold on to their phones longer, leading to the first annual decline in global smartphone sales last year.
For Samsung, a successful launch would mark a victory over China’s Huawei Technologies Co., which has leapfrogged Apple Inc.’s iPhone to become the world’s No. 2 smartphone vendor in recent quarters. Huawei executives say they want to grab the world’s No. 1 spot by 2020.
Huawei also plans a foldable device, called the Mate X, which is expected to be released this fall. It packs a bigger screen than the Galaxy Fold—and will command a price tag of about $2,600, more than 30% higher than Samsung’s. Huawei has made no changes to its release schedule, a company spokesman said.
Samsung previously encountered product-performance problems with its Galaxy Note 7 devices in 2016. The South Korean company ultimately pulled the devices from circulation after some overheated, costing it billions of dollars.
The Galaxy Fold’s release is being closely watched because of its radical design: It sports a tablet-size screen that folds in half like a book, allowing users the portability of a phone that could fit in a consumer’s hand, pocket or purse. When folded, the phone, which costs nearly $2,000, boasts a second, smaller display on the outside that can perform most tasks.
Samsung shares slid 3.1%% on Thursday compared with a1.4% decline for South Korea’s benchmark Kospi Index.
Initial U.S. interest in the Galaxy Fold had appeared strong over the weekend: Barely 24 hours after opening the queue, Samsung closed off applications for a preorder reservation list.
Given the steep price and niche market, the tech reviewers’ broken Galaxy Fold phones are unlikely to result in significant consumer blowback, said Wayne Lam, principal analyst at IHS Markit, a market researcher.
“This speaks to the difficulty of making a new technology like this work,” Mr. Lam said. “The phone will sell on novelty of display alone.”
Samsung is expected to ship 1 million Galaxy Fold units, at most, in 2019, a fraction of the nearly 300 million smartphones the company sells every year, according to Counterpoint Research, a market research firm.
“From the business point of view, it’s not a game changer but more of an embarrassment for the company,” said Peter Richardson, a research director at Counterpoint.
The smartphone industry, after a tough year, is looking for momentum. Global smartphone shipments sank 5% in 2018, the first annual decline, according to Strategy Analytics, a market researcher. But Samsung, which ships roughly one of every five smartphones globally, saw a drop of 8%.
This year, Samsung planned a mobile-unit turnaround by aggressively pushing technological advances. It doubled the number variants of its primary flagship, the Galaxy S10, to four—including a 5G-enabled version that hit shelves earlier this month in South Korea.
In February, Samsung moved up a phone-launch event by a week to unveil the Galaxy Fold device, forgoing its traditional venue at a mobile trade show in Barcelona. The reason: Huawei was showcasing the Mate X at the same event, according to people familiar with the matter.
Samsung had posted a video showing its tests of the folding screen, which the company said could withstand being opened and closed more than 200,000 times—the equivalent of roughly five years of use.
The fact that Samsung didn’t postpone the Galaxy Fold’s release shows its confidence in the product, said Nicole Peng, a senior director at Canalys, which tracks smartphone sales. But the incident could be an opportunity for competitors making rival products.
“Samsung’s problems can be Huawei’s opportunity,” Ms. Peng said.
Tech reviewers started publicizing issues with the Galaxy Fold devices on Wednesday. At least two reviewers reported cracked, flickering screens within two days of normal use. The screens of another two units reportedly blacked out and lost control after reviewers peeled off the top layer of the display, mistaking it to be a removable protective cover.
Tech news website, the Verge, said “a small bulge” appeared at the crease of the foldable screen after just a day of using the phone, and the object “eventually pressed sharply enough into the screen to break it.” CNBC said the Galaxy Fold phone’s screen failed two days into testing. “The left side is just flashing and the right side, you can’t use at all,” said the CNBC tech reviewer in a video.
Consumers will be given clear warning to not remove the top layer, Samsung said.