A concept device using Samsung's foldable display technology. Image source: Samsung Display.
If you liked the unique display that curves around the side of Samsung's (NASDAQOTH: SSNLF) Galaxy Note Edge phablet, you'll absolutely love this. At an investor event in New York earlier this week, Samsung revealed plans to commercially launch a device featuring a flexible display that can be folded in half.
"We plan to provide consumers with a product that has a flexible display by the end of" 2015, elaborated Samsung Display VP Lee Chang-hoon. "However, nothing has been decided on the finished product."
Lee also stated that Samsung Display -- which is an affiliate and display provider to Samsung Electronics -- will secure "great production capacity" of 30,000 to 40,000 such displays each month by the end of next year. That might seem small at first, especially considering the tens of millions of flagship Galaxy series smartphones Samsung currently sells each year. But over the near term, it's a feat no other flexible display manufacturer will be able to claim.
Surprise?
Samsung's Galaxy Note Edge features a display which curves over one side. Credit: Samsung.
While no final design decisions have been made, this also isn't entirely surprising. In fact, shortly after the Galaxy Note Edge was released, I even called it the most exciting phablet yet precisely because of its apparent role in fostering enthusiasm for future foldable devices. Sure enough, Samsung cited the positive reception of the Galaxy Note Edge as a contributing factor to its decision to expand the flexible-display product line.
Samsung has also long envisioned a variety of impressive concepts based on its flexible display technology. And while that includes the yet-to-be-built "newspaper" concept pictured above, note that Samsung reportedly showcased an actual prototype smartphone with a touch-sensitive foldable display to select VIP attendees at this year's annual Consumer Electronics Show in Las Vegas.
This also marks the next step in advancing Samsung's flexible YOUM line of displays, which the company first introduced at the Consumer Electronics Show in early 2013. And YOUM, for its part, is enabled by the flagship technology of organic light emitting diode, or OLED, IP and materials supplier Universal Display (OLED +0.17%), which counts Samsung as its single largest customer.
But wait! There's more ...
Earlier this month, Universal Display shares sank following the company's own disappointing third-quarter results, which were negatively affected by weakness in Samsung's high-end smartphone sales. To that end, Samsung also revealed a multi-tiered approach to turning around its struggling smartphone business.
First, while Samsung Display currently sells the vast majority of its products to Samsung Electronics, SDI management said they intend to "comprehensively" increase volume sold to outside OEMs, with a goal of achieving a 50/50 split within three years. That's great news for Universal Display, which in turn wouldn't be nearly as reliant on the outsized influence of Samsung's device sales.
Even then, however, Samsung's planned manufacturing capacity increases will also help lower costs for truly compelling, innovative products like flexible displays, which should help bolster its high-end device business.
More important is Samsung's focus on reducing prices for its mid- to low-end smartphones -- a category that, on the whole, isn't suffering the same unit sales weakness as more expensive high-end devices. But Samsung's recent decision to include traditional OLED displays in its lower-tier smartphones leaves it at a cost disadvantage to rival smartphone makers like Xiaomi, to which Samsung notably lost its top spot in China last quarter in terms of total smartphone units shipped.
To remedy that disadvantage, Samsung is working to reduce production costs of its beautiful OLED displays, which Lee insists will ultimately "become cheaper to produce compared to LCD" given that OLED doesn't require a backlight. "We are prepared to compete directly with LCD," Lee said.
Finally, Samsung will reduce the number of smartphone models -- not units, mind you -- it releases in 2015 by as much as a third compared to this year. By refocusing its product lineup and reducing the number of models, the resulting mass production synergies should help Samsung lower the cost of its smartphones even further.
For now, though, I wouldn't expect those cost synergies to extend into Samsung's upcoming flexible device. Not that it would matter much, as tech connoisseurs have embraced the Galaxy Note Edge despite its high cost and limited availability. Over the longer term, the costs for these kinds of cutting-edge devices will only continue to come down as production volumes increase. As that happens, it seems safe to say these bets on innovation will be a win-win for both Samsung and its tech-hungry consumers.
