Samsung ups the ante with new products

The new foldable smartphone from Samsung threatens to upend the smartphone market and may prove to be a boon for the share price.

Samsung Source: Bloomberg

The new foldable Samsung phone might be expensive, but it represents a challenge to Apple. At $2000 it is hardly a mass-market product, but as the first of its kind it will undoubtedly inspire a race among other smartphone producers, and Apple's response will be closely-watched.

The smartphone industry has been dominated by fears that the great innovations are behind it. The foldable phone is a hopeful sign that this might not be the case. Alongside the new foldable product are the S10 and S10 plus, which provide products in the middle of the price range.

In addition, the firm has pushed on with software development, which points towards a revamping of its offering across the board. The key point of differentiation now in smartphones is more about software, and Samsung has traditionally been a weaker performer in this area.

The problem for smartphone makers is that global shipments continue to decline, falling 4% over the year to 1.5 million units. In addition, users are taking longer to upgrade their phones, preferring to hold on to existing models for longer. Higher research and development costs are not being offset by the robust sales of yesteryear, hitting margins.

Samsung stock has rallied along with the broader global equity market since the beginning of the year. It managed to move back above the 200-day simple moving average (SMA) of 100,050 but has yet to breach the highs of the summer, when the zone around 107,000 provided resistance. However, the bullish impression remains unless we see a move back below the 95,000 level.

Samsung chart

Samsung chart


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