Samsung has plenty riding on the Galaxy Note10

Samsung Electronics has taken the wraps off the Galaxy Note10, the latest generation of a marquee stylus-equipped device the company hopes will arrest a slide in profitability and ward off Apple and Huawei.

The world’s largest smartphone maker unveiled its latest device in New York, which now comes in two sizes and with or without faster 5G. It will prove pivotal in Samsung’s effort to maintain a lead over its American nemesis and Chinese vendors such as Huawei that are increasingly eroding the Korean company’s share of premium devices.

The Galaxy Note10 line will consist of a 6.3-inch edition and a 6.8-inch model called the Note 10+. Prices start at US$949 for the smaller version and $1 099 for the bigger one, then go up from there depending on storage and 5G wireless capability. The new phone, which again sports its signature stylus, distinguishes itself from previous models with a nearly all-display front punctuated by a hole at the top for a selfie camera. Samsung is ditching the headphone jack in a flagship smartphone for the first time and offering USB-C earphones in the box. This follows the example set by Apple, which Samsung previously derided in TV commercials.

The absence of radically new capabilities may be the biggest drawback for the Note10, which appears to be speaking to Samsung’s existing audience more than it’s trying to attract a new one. Despite a smattering of enhancements, it may not be enough to set it apart from a crowded field — or from Samsung’s own bendable Fold.

It’s unclear “whether Samsung’s old formula of a big screen and stylus will make much of a difference these days, especially when it’s living in the shadow of glitzier products like the Galaxy Fold”, International Data Corp analyst Bryan Ma said ahead of the launch.

The Note10 comes at a challenging time for a company reeling from its bungled Galaxy Fold launch and confronting a challenging market. Samsung is counting on the Note10 to salvage mobile operating profits that fell 42% in the second quarter. Though the company retains the largest slice of the global smartphone market at over 20%, recent sales increases have mainly been driven by models that target the $300 price segment, while the Galaxy S10 lost steam early.

Conservative upgrades

Prolonged upgrade cycles, paired with Samsung’s conservative camera and feature upgrades, have opened room for aggressive Chinese smartphone makers. Unlike the Fold, the Galaxy Note is a mass-market product with significant bottom-line implications for Samsung, and much rests on its reception among consumers. The new line-up goes on sale on 23 August (30 August in South Africa), mere weeks ahead of the postponed launch of the Galaxy Fold and Apple’s next iPhone.

“It will compete more with an installed base of older Note series than Galaxy Fold or iPhone 11,” Tarun Pathak, an analyst at Counterpoint Research, wrote in an e-mail. “There might be overlap or competition to a certain extent but not head-on.”

To appeal to S Pen fans, Samsung has improved a function that converts handwritten notes to text by allowing exporting to various formats like Microsoft Word, PDF and image files. The company added more air gestures, such as zooming the camera in and out by twirling the stylus. Samsung plans to also let developers write custom gestures for games and apps.

The Note10 also aims to rival the strong synchronisation between Apple’s phones, tablets and computers. A new “Link to Windows” feature lets users sync text messages and photos wirelessly between a Samsung phone and a Windows PC via a Microsoft account. Another mechanism, an enhanced version of Samsung’s DeX, lets you connect the Note10 via a USB cable to a Mac or PC to view a phone interface as a computer application.

A new PlayGalaxy Link function allows users to keep playing PC games on the device via streaming. The Note10’s camera features are mostly similar to the S10’s except for a video function called zoom-in mic, which amplifies sounds from the area of the screen you home in on. There’s also improved video stabilisation and an on-board editing app similar to Apple’s iMovie.

Fifth-generation networks are far from established in any country, which means the 5G Note10s may work mostly on existing 4G/LTE. 5G support is only available on the more expensive Note 10+. The new phones will come in black, white, chrome and a blue colour exclusive to the US.

Samsung will use its in-house Exynos 9825 processor for the first time in the Galaxy Note10 in Europe and parts of Asia, though it will rely on Qualcomm’s Snapdragon 855 for the key US, China and South Korea markets.

The Note10 should provide a margin boost for Samsung ahead of the holidays. Counterpoint’s data suggests Samsung sold about 9.6 million Note9 devices in its first year of availability, and projections from Counterpoint, Samsung Securities and IHS Markit suggest Samsung is unlikely to go beyond 10 million units with its new Note range.

“The average selling price of Samsung’s mobile phones will rise about 11% in the third quarter thanks to Galaxy Note10’s launch and a sales increase of A series,” Daishin Securities said in a 1 August note.  — Reported by Sohee Kim and Mark Gurman, with assistance from Nate Lanxon and Dina Bass, (c) 2019 Bloomberg LP