The business market is likely to be the next big battleground for both smartphone makers and mobile operators - and new formats will be the key to market share.
On Wednesday, Samsung launched the third-generation models of its foldable smartphones, the Z Flip and Z Fold. The latter is firmly aimed at the business market, to the extent that Samsung for the first time in a decade skipped the annual update of its productivity powerhouse, the Galaxy Note.
The initial version of the Fold was widely derided in 2019, for both a tiny front screen and shoddy build quality. Samsung made amends last year with a quality second-generation device, but a high price tag of just under R50,000 ensured it would make little impact on the market.
The Fold 3, in contrast, is priced just above the top end of the flagship phone market: still an eye-watering R37,999, but not dramatically more than the top-of-the-range iPhone 12 Pro Max, which launched at R32,999 last year.
R37,999
The cost of Samsung’s new Fold 3 phone
This time, said Justin Hume, head of integrated mobility at Samsung SA, the mobile operators are fully behind the format, and the new price point will find a ready business audience. Ironically, however, large enterprises are not the core target.
"We're specifically targeting small and medium-sized enterprises," said Hume. "We believe that this is a perfect product for the type of diversity of business needs that they have. The entrepreneur needs to have access to both a personal product as well as business product simultaneously."
The key to selling this value proposition will be the large data bundles that have become a staple of the mobile operators' offering to heavyweight smartphone users.
"One of the key things that we are looking at in this regard is what is referred to as 'bolt-on' in this country. With the mobile operators, we'll be looking at a number of different package solutions, but high data usage is a key focus point. So you're going to find some amazing offers coming through from the way that data has been invested in by the mobile operators," said Hume.
The strategy ties in directly with the strategic intent expressed in Vodacom's most recent annual report, in which it states: "We are . focusing on becoming the SME ICT provider of choice by establishing a platform ecosystem, further supporting our transition from a telco to a techco."
Its offering to enterprise clients during the pandemic, it says, is "a sustainable solution to keep their workforce connected".
"We also developed solutions to support the rebuilding of customer businesses and implement return-to-workplace solutions," it says. "We revised our SME segment strategy to enable us to service this market better and unlock further value."
Meanwhile, MTN is ramping up its customer-service structure to address the demands of "the new work-from-home world", with the appointment of Vodacom and Oracle veteran Cornelia van Heerden in a new position, that of chief of customer service operations, from September 1.
MTN SA CEO Godfrey Motsa said: "Our clients have faced unprecedented challenges over the past 18 months . with more customers relying on mobile and digital solutions than ever before.
"We aim to constantly improve our standards and scope of service to match new, more technical and tailored demands."
This nuanced strategy also provides context for the shift from Samsung's past approach of separating the launches of business-focused and consumer-focused devices. As the foldable category matures, operators will be able to slot it into various packages and bundles, but will be looking for competitive pricing from manufacturers.
The entrepreneur
needs to have access
to a personal and
business product
simultaneously
As a result, the new foldable phones had been expected to come down in price, but Samsung startled the market with the extent of the price drop. The Z Flip 3 will be available from next month for a cash price of R21,999, compared to R29,999 for the original 2020 edition. Contract deals for both the Flip and Fold will be more palatable, starting at R699 a month for the former.
The Z Fold 3 has similar specs to its predecessor, with a 6.2-inch cover display and 7.6-inch foldout screen, but this time both screens have a 120Hz refresh rate, meaning they are more responsive and their operations smoother than that of the typical smartphone's 60Hz or 90Hz. It is the first foldable screen with an under-panel camera lens, meaning that it no longer has the unsightly notch most high-end smartphones use to house a selfie camera.
Said Hume: "This is the right time to firmly establish the category. The Fold 1 was about getting the concept of foldable out. We then went to Fold 2, with new features and use cases. Whenever we've introduced a new category, the third generation is where we bring it to mainstream, where the design aspect and functionality are well established, and the services and ecosystem that integrate with it are complete."
A key question in the business market is whether that is enough to justify dropping the hugely popular Note.
"The Note set the trend and the direction," said Hume. "It's always been about a bigger screen, more power, more productivity. But at some point it's impractical to go bigger; how would you get it in your pocket?
"So now we've got a bigger screen through folding a device, with Note functionality. This not only ensures unique form factors coming through, but maintains the productivity aspect with which the Note user is intimately familiar."
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