Driving Upgrades: Products Invests in AI for Next-Gen Foldable Phones

In a luxurious hotel in downtown Paris, TM Roh, the mobile head of Samsung Electronics, showcased a suite of the company’s latest innovations, including foldable smartphones and the newly introduced smart ring. This presentation underscored Samsung’s strategy to immerse customers in its ecosystem, aiming to enhance sales by offering an array of interconnected products. As the leader of the world’s largest smartphone manufacturer, Roh is charged with steering the company into the era of artificial intelligence.

During a recent interview with CNBC, Roh discussed Samsung’s vision for Galaxy AI, a suite of AI features designed to enhance user experience and engagement. He highlighted the company’s efforts to monetize software, alongside developments in upcoming products like mixed reality headsets. The conversation took place ahead of Samsung’s Galaxy Unpacked event, where the company unveiled its latest smartwatches, foldable smartphones, and the Galaxy Ring, marking its entry into the smart ring market.

Samsung is currently experiencing heightened interest in its smartphones, spurred by the release of the premium S24 range earlier this year and robust marketing efforts surrounding its AI functionalities branded as Galaxy AI. These features include an interpreter tool for real-time language translation and a Notes app capable of recording, transcribing, and summarizing spoken content.

With AI at the forefront of Samsung’s strategy this year, the company aims to stimulate sales of its premium devices, particularly as consumers are increasingly holding onto their phones for longer periods and are more cautious with their spending habits. Roh asserted that enhancing AI capabilities in their products will provide consumers with tangible benefits, which he believes will motivate them to purchase new devices.

The marketing campaign for Galaxy AI was prominent during the launch event, with slogans like “Galaxy AI is here” displayed throughout the venue, the Carrousel du Louvre, a renowned shopping and events space near the Louvre Museum. This reflects Samsung’s aggressive marketing strategy to promote its AI capabilities, especially in light of Apple’s recent announcement of its own AI features, known as Apple Intelligence, which will not be widely available until the fall and will not be accessible in certain regions, including China.

Despite the enthusiasm surrounding AI applications, many analysts remain skeptical that these initial offerings alone will drive significant smartphone sales. Roh anticipates that mobile AI technology will evolve over time, similar to how the internet and smartphones gradually gained widespread acceptance and integration into daily life.

Historically, Samsung’s mobile division has generated revenue primarily through hardware sales, in contrast to Apple, which benefits from both device sales and substantial income from its software and services. Samsung’s reliance on Google’s Android operating system limits its control over software development and the promotion of its own applications, while Apple benefits from its proprietary iOS system.

As Samsung integrates more AI into its apps, including an upgraded version of the AI assistant Bixby based on its own large language model, Roh suggested that the typical app distribution through app stores may change. He expressed the company’s commitment to enhancing its software and applications, indicating that Samsung is focusing on making its apps more prominent and intuitive for users.

While discussing potential monetization strategies for these AI-driven applications, Roh indicated that Samsung is attentive to market feedback and expert advice. He noted that subscription models could be an option, allowing AI features to serve as incentives for consumers to purchase new hardware. However, he emphasized that any decisions would prioritize both consumer satisfaction and the business interests of Samsung Mobile.

Looking ahead, Roh hinted at future innovations in foldable technology and mixed reality products. Samsung, having pioneered foldable smartphones with its initial device launch in 2019, is poised to continue evolving in this area. Roh mentioned that advancements in both hardware and software could lead to new product categories featuring foldable technology, although he refrained from specifying what those categories might be.

Additionally, Samsung is developing a mixed reality headset, a technology that combines augmented reality with real-world elements. Following a partnership with Google and Qualcomm last year to create a mixed reality headset, updates about the device have been sparse. Given the recent focus on mixed reality following Apple’s launch of the Vision Pro, Roh acknowledged the potential of these devices to transform mobile experiences and ecosystems. He confirmed that Samsung plans to announce a new mixed reality platform within the year, although he withheld further details, suggesting it will primarily focus on software developments.