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Samsung Galaxy Fold phones are breaking. Here's why it doesn't matter

By Samantha Murphy Kelly, CNN | Posted - Apr 18th, 2019 @ 4:09pm



NEW YORK (CNN) — The Samsung Galaxy Fold is launching next week as planned, despite reports from some early reviewers that their devices broke after just a few days of use.

It might seem like a risky move for Samsung to move forward with the launch on schedule, but the company has a lot riding on the luxury $1,980 device — a 4.6 inch-smartphone that opens up into a 7.3-inch tablet.

Analysts say the device could shake up the mobile device market, which has plateaued in terms of both sales and innovative new features. Pre-orders of the Galaxy Fold have already sold out online. (Samsung declined to share how many were originally available.)

But now Samsung is grappling with news that some reviewers discovered defective hinges and their screens broke after removing the Fold's protective film. In a statement sent to CNN Business, the company said "removing the protective layer or adding adhesives to the main display may cause damage. We will ensure this information is clearly delivered to our customers."

Moving ahead would be risky for any company, but the stakes are higher for Samsung given its history. The South Korean company has worked hard for the past two and a half years to win back consumer trust following its Galaxy Note 7 debacle. Millions of those devices had to be recalled due to reports of exploding batteries.

Despite this week's setback, experts say the Galaxy Fold isn't necessarily dead on arrival.

"Was the (Galaxy Fold) risky? Of course," IDC research director Ramon Llamas told CNN Business. "But risk travels hand in hand with innovation, and something that companies have learned to embrace. Very rarely does a first-generation product — especially something as hyped up as this one — live up to expectations."

It's currently unclear if these are isolated incidents or part of a larger issue, but not pushing back its April 26 launch potentially suggests Samsung believes it is the former. The company said it will "thoroughly inspect these units in person to determine the cause of the matter."

Either way, it will be critical for Samsung to be transparent about what it learns and move swiftly.

"Samsung needs to look into these cases quickly and be clear with the public, particularly those with pre-orders, about the cause of the issues, how they will be fixed, and how they will be prevented moving forwards," said Stephanie Tomsett, research analyst at ABI Research. "Consumers are likely to be concerned about this news, and their concerns need to be addressed to ensure that this new device is as popular as previously expected."

Following the Galaxy Note 7 recall, the company redesigned its battery system to prevent future explosions. It also benefited from the fast-paced cycle of the smartphone industry, which allowed consumers to shift their focus to the Galaxy S8.

"It worked," Llamas said. "If anything, setbacks like these tend to bolster companies' drive to get it right."

Samsung doesn't want to be so safe that it abandons its reputation as an industry innovator.

"We have arrived at the point where innovation has reached a plateau, and most new features that companies hawk are variations on a theme we have seen before," Llamas said. "Bigger screen? Seen that. Camera taking great pictures? Got that too. And staying on that path practically dooms the market into becoming a commodity business, and no one wants that."

At the same time, senior analyst Ben Stanton of Canalys called the Galaxy Fold "not a great risk" from a business perspective.

"The Galaxy Fold is the most daring technical innovation we have seen in smartphones for some time. But it was not intended to be a volume driver this year," he said. "Samsung does tend to innovate in this low-risk way, where its cutting-edge technology tends to sit in a different device to its tried-and-tested flagships."

He likens it to Samsung's first shot at a curved display with the Galaxy S6 Edge. On the other hand, Apple tends to mostly innovate with its most important flagship devices. For example, Face ID is only a feature on its latest models.

"Samsung, unlike Apple, doesn't need to get it right the first time," he said. "It has invested heavily to develop folding displays and it is only just getting started."

Samsung also offers everything from mobile products to smart home gadgets and TVs. Apple, however, still generates the bulk of its profits from iPhones, even as it tries to diversify into services.

Samsung isn't the only company with a foldable phone in the works: Royole, Huawei, and Motorola are reportedly developing similar models.

"Their devices will be held up to the same scrutiny, or even held under a harsher light, to see if their quality can hold up," Llamas said. "It's the price of playing in this market. They need to be ready for that."

As for the consumers clawing to get their hands on first iteration of the technology, it might be wise to follow the age-old wisdom for new devices and software: hold off until the bugs are worked out.

The-CNN-Wire™ & © 2018 Cable News Network, Inc., a Time Warner Company. All rights reserved.

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