Samsung Delays Launch of Galaxy Fold After Screen Failures

(Bloomberg) -- Samsung Electronics Co. will delay the launch of its first foldable smartphone from the planned April 26 debut after reports of screen failures among some review units, a setback for the world’s biggest handset maker.

The Suwon, South Korea-based company said it would postpone the retail launch of the Galaxy Fold, without giving a new debut date. Several publications, including Bloomberg News, had reported a bevy of problems with test versions of the $1,980 device after only days of use. Samsung had said it would thoroughly investigate the issue, while initially indicating it would stick with the planned date.

“While many reviewers shared with us the vast potential they see, some also showed us how the device needs further improvements that could ensure the best possible user experience,” Samsung said in a statement. “To fully evaluate this feedback and run further internal tests, we have decided to delay the release of the Galaxy Fold. We plan to announce the release date in the coming weeks.”

Samsung aims to avert a fiasco like the Note 7 introduction in 2016, when smartphones that had already found their way into consumers’ hands showed a tendency to burst into flames. The episode, which triggered a global recall, cost the company billions of dollars in losses and damaged its reputation as it battled Apple Inc. in the premium devices market. Pulling the Fold now allows the Korean giant to address any potential issues as it races to put out a flexible gadget ahead of rival Huawei Technologies Co.

“Samsung Electronics still has at least one month to address Galaxy Fold issues and claim the lead in mass-producing foldable phones. Huawei likely won’t start shipping Mate X, its foldable model, until June,” Anthea Lai and Anand Srinivasan, analysts with Bloomberg Intelligence, wrote in a note Tuesday. “Such a delay could save the brand’s reputation from a repeat of the Note 7 debacle in 2016.”

Samsung has rebounded since then and was counting on the Galaxy Fold to extend its smartphone dominance while fending off emerging Chinese rivals such as Huawei. The foldable device, unveiled along with the flagship Galaxy S10 model earlier this year, has a 7.3-inch screen that unfolds into a tablet. Pre-orders began in mid April.

The delay is unlikely to have a significant financial impact on the company. Samsung, which spent eight years developing the Galaxy Fold, forecast it would produce at least 1 million units this year, a fraction of its overall shipments. Samsung shares were little changed in Seoul trading on Tuesday.

Huawei and Xiaomi Corp. have also developed their own versions of bendable-screen gadgets and Samsung was pushing to be the first to roll out foldable phones to the masses.

To contact the reporters on this story: Sam Kim in Seoul at skim609@bloomberg.net;Mark Gurman in San Francisco at mgurman1@bloomberg.net

To contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Peter Elstrom, Jillian Ward

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