Memory Costs Drive Samsung Foldable Phone Price Hikes

According to Samsung Electronics, the company has unveiled a new generation of larger foldable smartphones and increased the prices of its latest premium foldable models, as it navigates rising memory chip costs and prepares for intensified competition from Apple in the rapidly growing foldable smartphone market.

A pioneer in foldable smartphones, Samsung is expected to face stronger competition as Apple reportedly prepares to enter the segment. Industry analysts believe Apple could introduce its first foldable device later this year, featuring a display size comparable to the iPad mini.

"Strategically, this is one of Samsung's most important foldable launches," said Francisco Jeronimo, Vice President at IDC. "Samsung has to defend the category it created, so it cannot afford to take a conservative approach."

At its product launch event in London, Samsung introduced three new Galaxy Z series foldable smartphones featuring Alphabet's Gemini artificial intelligence capabilities. The passport-sized Galaxy Z Fold8 now offers a larger display and is priced at $1,899. The company also raised the prices of the premium Galaxy Z Fold8 Ultra and the clamshell-style Galaxy Z Flip8 by $100, bringing their retail prices to $2,099 and $1,199, respectively.

Despite broader challenges facing the smartphone industry, IDC forecasts Samsung will increase its global smartphone market share in 2026. While the overall smartphone market is expected to decline by 14% due to factors including memory chip shortages, foldable smartphone shipments are projected to grow by approximately 20%, highlighting continued demand for premium devices.

Several analysts expect Samsung's mobile division to report its first-ever quarterly operating loss for the April-to-June period, as soaring semiconductor costs continue to pressure profitability. However, higher memory chip prices have significantly improved margins in Samsung's semiconductor business, driving earnings in that segment to record levels.

According to Omdia, memory and storage account for more than 60% of the bill of materials (BOM) cost in entry-level smartphones, compared with more than 30% in flagship models.

Sheng Win Chow, Senior Analyst at Omdia, noted that premium smartphones priced above $1,500 allocate a smaller percentage of their BOM to memory than mid-range devices, giving manufacturers greater flexibility to absorb higher semiconductor costs.

"The more difficult challenge is justifying higher retail prices," Chow said. "A larger display alone is no longer enough to persuade consumers."

On the hardware side, both the Galaxy Z Fold8 and Galaxy Z Fold8 Ultra are powered by Qualcomm's latest flagship processor, while the Galaxy Z Flip8 uses either a Qualcomm chipset or Samsung's Exynos processor depending on the regional market.