The Galaxy Note 10 dilemma: Getting out of the Galaxy Fold's shadow

When Samsung introduced the first Galaxy Note in late 2011, it was something never seen before. The device sported a 5.3-inch screen, which was much larger than the iPhone 4S' 3.5-inches screen, and included a stylus to write on the display. As the line evolved, Samsung put its riskiest and most innovative technologies -- like its curved display and iris scanner -- into the Note before expanding them to other devices.
The Note marked the start of the new phablet category of devices that merged phones and tablets. Many reviewers wondered if anyone would buy a smartphone with such a massive display. But they did. Anyone who wanted Samsung's most innovative technologies and biggest screen sought out a Note, and a fervent fan base was born.  
Pretty soon, every other company in the mobile industry introduced large-screen smartphones, even Apple. That's where part of the struggle lies for the upcoming Galaxy Note 10.
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Today, the phablet category doesn't exist anymore because essentially every phone's a phablet. While 5.3 inches seemed massive in 2011, it's now tiny compared with the 6.5-inch iPhone XS Max, not to mention the 6.67-inch OnePlus 7 Pro or the 7.2-inch Huawei Mate 20 X. Samsung's own Galaxy S Plus models are essentially the same size as the Note lineup (the S10 Plus and Note 9 both have 6.4-inch screens), and the designs are similar. So are the prices, with both starting at $1,000.
The Note family, which gets a new member when Samsung unveils the Note 10 at an event Wednesday in Brooklyn, New York, no longer features Samsung's most innovative technologies. That title goes to the Galaxy Fold, the company's upcoming phone that unfolds into a tablet. Even the Galaxy S lineup has gotten new technologies before the Note, including three camera lenses, the ultrasonic in-display fingerprint sensor and the ability to wirelessly charge other devices on the back of the Galaxy S10. The Galaxy S10 also was the first Samsung phone to come with a 5G option.
The Note is no longer the innovation leader, nor is it the biggest Samsung phone (though it could regain that crown with the Note 10). Its main differentiator is the S Pen stylus, and that's not something every Note owner uses. With the Note 10, Samsung has to find a way to again make the device a no-brainer for power users. Otherwise, there may no longer be a clear need for the phone.
"The design of the Note is actually really close to the S line, so that differentiation has kind of gone away," Creative Strategies analyst Carolina Milanesi said. "The question becomes, do you need both lines?"
Samsung declined to comment.

Smartphone malaise

Samsung -- and pretty much everyone else -- is having a tough time selling high-end devices. Phone prices are increasing, and people are upgrading less often. If someone's buying a $1,000 phone with all the bells and whistles they can imagine, they tend to hold onto it longer than before. In the US, consumers now upgrade to a new model about every three years instead of every two. At the same time, software updates make old phones feel new, hardware designs aren't changing much from year to year and less expensive devices are getting features previously found only in pricey flagship phones.

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Global smartphone sales have declined for seven straight quarters. In the second quarter, shipments slid 3% to 341.4 million units, according to Strategy Analytics, though the firm said the overall market is showing signs of stabilization.
"The outlook for the second half of this year is improving," Strategy Analytics analyst Linda Sui said.
Last week, Samsung and Apple both reported earnings for the June quarter that reflected weak demand for their priciest phones. In Apple's case, iPhone sales dropped 12% from the previous year, and its overall net income tumbled 13%. Samsung's overall handset sales rose about 7% to 24.3 trillion won (about $20 billion) -- and the company increased its lead in the global smartphone market share by two percentage points to 22%, according to Strategy Analytics. But the gain was largely because of Samsung's cheaper A Series devices.
"Sales of flagship models fell [from the first to the second quarter] on weak sales momentum for the Galaxy S10 and stagnant demand for premium products," Samsung said.
To help turn things around, Samsung said it "will focus on successful launches of new innovative products -- the Galaxy Note 10 and Galaxy Fold" in the third quarter, as well as introduce more 5G phones and A-Series devices.

Note 10 tweaks

But the "innovative" Note 10 isn't expected to get any huge upgrades. The device is rumored to have three camera lenses on the back, the same as the Galaxy S10 and S10 Plus from earlier this year. It may ditch the headphone jack -- a controversial change for a major Samsung phone -- and likely will come in two screen sizes. That could again make it the biggest smartphone in Samsung's lineup. There will also likely be a version with 5G connectivity to take advantage of the super-fast mobile networks launching around the globe.
The Note has one big benefit over the Galaxy S: its timing. Apple typically introduces its newest iPhones in September. By that point, Samsung's Galaxy S lineup feels old. But a Note, arriving in August, is brand new, giving people an alternative to the upcoming iPhones.
The Note is also the only smartphone from Samsung -- and one of the few on the market, period -- to feature a stylus. Samsung has continuously improved its S Pen and has added new capabilities. Last year, the Note 9's stylus could act like a remote for the phone's selfie camera. It's likely that Samsung will improve the S Pen again this year.
But those tweaks won't solve the biggest problem underlying the mobile market's struggles: It's tough to come out with huge changes each year and get people excited about phones again.
There's where innovations like foldable screens and 5G come in.

The Galaxy Fold's shadow

Samsung's answer to the mobile malaise has been the Galaxy Fold, which sports the company's Infinity Flex display that can bend and fold. The $1,980 device, one of the first major smartphones to incorporate a foldable display, has been positioned as the future of the mobile industry. It wowed reviewers and consumers and generated a lot of buzz after Samsung unveiled the device.
But the Galaxy Fold has faced hiccups since its announcement. Samsung initially planned to launch the device on April 26, but it delayed the Fold when the screens on some reviewers' test phones broke. Some peeled off a thin top layer on the display, which was an essential protective coating, not a removable screen protector. Others had debris get under the screen itself, causing bumps and bulges. Samsung canceled the release date to explore what happened.
In late July, 89 days after the Galaxy Fold was to go on sale, Samsung said it had addressed the issues experienced by those reporters. The company said the device would hit the market in September, five months after its original sales date -- and mere weeks after the Note 10 likely will go on sale.
This year, the Fold is mostly for early adopters who want to play with the absolute cutting edge innovations in mobile. Eventually, foldable displays will move down the lineup and drop in price, becoming an option for more of us.
When that happens, the Note's time as a separate smartphone line may be limited.
"It's a fair question to ask, 'at what point do these lines meld?'" Technalysis Research analyst Bob O'Donnell said. "Arguably at some point, that does make sense."
Until the Fold becomes more mainstream, the Note has the potential to be the best-of-the-best for the rest of us. We'll find out Wednesday if that's the case with the Note 10 -- or if we should hold onto our old models a little longer.

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