Market Overview

Why This Analyst Says Samsung's Foldable Phone Isn't That Impressive

Share:
Why This Analyst Says Samsung's Foldable Phone Isn't That Impressive

Smartphone maker Samsung Elect Ltd (OTC: SSNLF) is expected to release a smartphone with a foldable screen in the near term, but one factor makes the achievement less impressive, an analyst said: the steep price tag.

The Analyst

CLSA's senior analyst Sanjeev Rana discussed Samsung's new phone during a Monday CNBC interview.

The Thesis

Samsung's foldable phone is expected to launch in the coming months at a time when demand for smartphones is down across the world, so consumers are unlikely to be interested in paying $2,000 or more for a phone, Rana said.

The high cost of existing flagship phones, at $1,000 or more, could help explain slumping demand, the analyst said, adding that Samsung itself has only "modest expectations" for the new device and is targeting total sales of less than 1 million units.

Investors who view Samsung as merely being a smartphone maker with other businesses on the side may want to reconsider their thesis, Rana said. During the company's second quarter, the smartphone business contributed only 18 percent of total earnings. This marks a reversal from five years ago, when the smartphone business accounted for around 70 percent of Samsung's total profit.

Adiversification away from smartphones isn't necessarily a bad thing for Samsung, Rana said: its broad lineup of technology products implies it has exposure to fast-growing trends, including artificial intelligence, the Internet of Things, the upcoming 5G rollout and the cloud.

Related Links:

Samsung's 'Unbreakable' Smartphone Screen: What You Need To Know

10 Ways AI Has Made Your Life Easier, Via Your Smartphone

Photo courtesy of Samsung.

Posted-In: CLSA CNBC Foldable Phone SamsungAnalyst Color Analyst Ratings Tech Media Best of Benzinga

 

Related Articles (SSNLF)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
CAGRBC CapitalInitiates Coverage On30.0
AIGEvercore ISI GroupInitiates Coverage On
AVYCitigroupMaintains132.0
TIFMorgan StanleyMaintains94.0
ALLYCitigroupMaintains38.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

US Dollar Rises Across The Board - 3 Reasons Why And 3 Currencies Affected

Twitter Wins Nomura Upgrade As Shares 'Appropriately Reset'