Samsung has a pair of new foldables in the form of the Galaxy Z Fold5 and Flip5. Both devices were officially unveiled globally at a live streamed event in Seoul, South Korea, but there was also a local version hosted by Samsung Mobile South Africa.
By all accounts, the hero product for this latest pair of devices is the Galaxy Z Flip5, which features a range of updated specifications, refinements to its hinge, and a much larger cover screen called the Flex Window.
All of these improvements do not come cheap, with the Z Flip5 costing far more than its predecessor at R29 999 (RRP). That’s a sizeable sum for a foldable device that is very much being marketed to the Gen Z crowd.
While Samsung is hedging its bets on contract pricing being more palatable, especially over 36-month long options, we still question whether are funds to match any appetite for a new R30k foldable that’s on the market.
To answer that question, as well as a couple of other ones, we spoke with Samsung SA’s MX lead for Product and Commercial Management, Zahir Cajee.
Our first query was how well South Africa’s premium/flagship phone space has been performing for Samsung. At the launch of the Galaxy S23 series earlier in the year, the company made the bold prediction of this segment doubling over the course of 2023.
We were skeptical that Samsung was on track for this, particularly as the company suffered a down quarter recently, but according to Cajee, Samsung is indeed on track.
“I remember that conversation, and we spoke about the flagship market being pretty resilient here in South Africa. We’ve seen two dynamics impacted within the segment as ultra premium ($1 000-plus) has seen an upwards of 20 percent growth and in the sub-$800 ($600 to $800) category we’ve seen a 50 percent rise year-on-year,” he explained.
The same applies to the company’s projection for the foldables market in SA, which contributes to the premium/flagship segment.
“We are expecting a minimum 20 percent growth within foldables. Samsung is currently seeing 9 pecent of market share, so we are driving foldable growth. Foldable as a contribution to flagship is expected to be between 8 and 10 percent this year. Last year was between 6 and 7.5 percent, so we are expecting thew contribution of foldable within flagship to continuously grow,” Cajee unpacked.
As for how Samsung expects to sell a R30k foldable to a Gen Z audience, the company is betting big on its pre-order offers and trade-ins, with the latter in particular helping to make a dent on the contract pricing of the device.
“This is part of the reason why we’re making these phones more accessible, as we know we’re able to sell in the growth segment of ultra premium, but we want to make it accessible and that’s where the trade in offer comes into play,” he continued.
“It helps to bring your tariff subscription down in the R699 or R799 type of price point on the Flip5 specifically,” Cajee highlighted.
When asked about how the focus on Gen Z, which is normally been where the Galaxy A series has factored, in lieu of a new and more expensive product, the MX lead was quietly confident that Samsung has done its homework.
“We do a lot of research when it comes to what demographic will be coming in for a device, and you’re spot on about A series. If I can use the example of Black Friday last year. Just before it, those devices (Galaxy Z Flip) were selling on contract at R1 000 per month, but during Black Friday and over a two week period we sold those devices at R699 per month. The A series customers made up 5 percent of those coming in for the Z Flip before Black Friday, but that increased to 30 percent while we ran that promotion,” Cajee pointed out.
“It’s really about bringing the right device at the right price point for this particular audience, and again the trade-in offer is structured that way to make it affordable. Qualifying devices will allow you to trade in your A series, A31 and up in fact, to be able to qualify for that offer,” he noted.
Added to this is a heavy focus on what Samsung is calling “nowstalgia”. Marketing terms aside, the company appears to be leaning into the current obsession with Y2K among Gen Z consumers across the globe, so expect to see a lot of activations and engagement with local audiences under this theme.
The aforementioned Fliptown roadshow will be playing a big part too, as Samsung ramps up to the 11th August pre-order and subsequent 25th release of the Fold5 and Flip5.
It will be interesting to see whether Samsung’s efforts are rewarded when it comes to focusing on Gen Z consumers. Regardless, however, it looks like the company is pivoting its strategy to sell its more expensive devices to this key demographic.
