Earlier on July 10^th, in the Galaxy Unpack 2024 event in Paris, Samsung introduced its AI smartphone Galaxy Z Fold6 and Galaxy Z Flip6, along with the “Google Gemini” app installed in the models. However, according to the reports by Reuters and Business Korea, these two tech giants may be facing the investigation of the European Union (EU) antitrust regulators, on whether the collaboration might impede market access for other AI developers or limit competition.

It has been a while since the two tech heavyweight started to team up on AI. Samsung’s first AI phone, Galaxy S24, released earlier this year, has featured its self-developed AI, Gauss, as well as Google’s Gemini Nano.

The EU has ramped up its market monitoring efforts following the implementation of the Digital Markets Act (DMA) in March, focusing on major global tech companies. The DMA identifies seven companies—Google, Amazon, Apple, Meta, Microsoft, Booking and ByteDance —as ‘gatekeepers’ and imposes specific regulations on them to ensure fair competition in the digital market, Business Korea noted.

Now the spotlight has been shifted to the AI sector. According to Reuters, EU antitrust regulators are inquiring whether Google’s multi-year generative AI deal with Samsung hampers rival chatbots on Samsung smartphones. The report noted that last month, the European Commission announced it would send requests for information to understand the impact of the deal, which involves Samsung embedding Google’s Gemini Nano in its Galaxy S24 series smartphones.

According to the Reuters report, regulators are investigating if the pre-installation of Gemini Nano limits the functionality of other chatbots and applications on Samsung smartphones. The EU also asked companies whether they had attempted to enter into pre-installation agreements with Samsung for their chatbots and, if so, requested explanations for any failures. Respondents are required to complete the urvey by this week.

If anti-competitive practices are confirmed, an antitrust investigation against Google and Samsung could be initiated, Reuters stated.

According to Business Korea, after the Galaxy Unpacked 2024 event, TM Roh, President of Samsung Electronics (Head of MX Business Division), addressed regulatory risks during a press conference, saying the company is having various discussions internally and externally regarding EU regulations.

Roh also emphasized Samsung’s commitment to data security, stating that sensitive information is processed on-device (without connecting to external servers), making it inaccessible even to the company,” and highlighted the company’s approach to giving consumers the choice of using AI functions on-device or via the cloud.

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(Photo credit: Samsung)

According to MoneyDJ’s report, Samsung Electronics, the South Korean smartphone giant, unveiled its latest foldable phones, the Galaxy Z Fold5 and Galaxy Z Flip5, in August. With a year until the next generation hits the market, speculation is arising that Samsung plans to incorporate foldable features into mid-range models. This move aims to lower the entry barrier, attract a broader customer base, and strengthen Samsung’s leading position in the foldable phone market.

TrendForce recently reported that Android smartphone brands are actively entering the foldable phone market, aiming to break through the plateau in smartphone market growth with the unique design of foldable phones. However, the widespread adoption of foldable phones faces a significant obstacle in their high pricing.

According to supply chain sources, Samsung is set to launch a mid-range foldable phone in 2024, targeting a relatively budget-friendly price range of $400 to $500 USD.

In August, Samsung launched its latest generation of foldable phones, the Galaxy Z Fold5 and Galaxy Z Flip5, maintaining a premium pricing strategy. The suggested retail prices are $1,799 USD for the Galaxy Z Fold5 and $999 USD for the Galaxy Z Flip5.

The market is eagerly anticipating Samsung’s introduction of a mid-range foldable phone. However, as of now, this remains in the speculative phase, and there’s no information available regarding its design, specifications, or other details.

Previous market rumors suggested that Samsung’s Z series of foldable phones might follow the flagship S series by introducing a “Lite Flagship” FE version. This version is expected to feature hardware downgrades to offer a more budget-friendly price, aiming to attract consumers.

According to a TrendForce’s forecast, as foldable phones gain increased acceptance in the consumer market, the global shipment volume of foldable smartphones is estimated to reach 18.3 million units in 2023. This represents a substantial 43% growth compared to 2022, although it accounts for only 1.6% of the total smartphone market sales. Looking ahead to 2024, the shipment volume is expected to grow by another 38%, reaching 25.2 million units, and the market share is projected to increase to 2.2%.

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(Photo credit: Samsung)

As we enter the second half of 2023, smartphone brands are eagerly launching their new devices, hoping to revitalize the market that is yet to fully recover. Among them, Samsung stands out with its ambitions to captivate consumers with flagship models while maintaining stability in the mid-to-low-end segment.

However, the Galaxy A and M series, targeting the mid-range to low-end market, have faced lackluster sales. To reverse this trend, Samsung is gearing up to unveil new devices in the coming months, including the highly anticipated Galaxy Fold/Flip5. This foldable flagship is seen as a game-changer that could drive up shipments in the latter part of the year.

The company’s flagship models, which encompass the Galaxy S and Fold/Flip series, account for about 20% of its total shipments. Within this segment, foldable devices contribute approximately 5% to the overall sales.

On the mid-tier front, Samsung is planning to introduce the S23FE series later this year, targeting the mid-range flagship market. Although the S23FE will feature a dual-platform of AP configuration, catering to different regional markets, it will be equipped with older-generation processors. As a result, its potential to significantly boost sales might be limited. According to TrendForce’s estimate, the total production and shipment of the S23FE series are expected to be less than 1.5 million units by the end of 2023.

A comprehensive view of Samsung’s strategy reveals that the second half of 2023 will be driven by the flagship Fold/Flip and FE series. Despite the company’s efforts, the overall performance will still be influenced by the prevailing economic conditions, posing significant challenges.

Notably, the decision to unveil the FE series in the fourth quarter marks a strategic departure from the previous year’s delay of the S21FE until the following year’s first quarter. This move by Samsung demonstrates a strong commitment to address the market gap resulting from the absence of the A7x series mid-range models. By positioning the mid-tier flagship as a compelling marketing point, Samsung aims to entice consumers to upgrade their devices, potentially bolstering the company’s sales and maintaining a robust presence in the highly competitive smartphone market.