Samsung’s James Kitto says the future for phones is foldable

James Kitto recently took over the UK and Irish phone (or ‘MX’ as Samsung calls it) division after longtime boss Conor Pierce moved to steward Samsung’s Poland operation. The former Nokia, Accenture and HR tech executive says that Ireland broadly resembles other European markets in its switch to more expensive, premium handsets, but lags the UK in the length of operator contracts being offered (Irish consumers are mostly offered 24 months, while Britain has largely moved to 36 months).

Folding phones, such as Samsung’s various Flip and Fold devices, will make up 25pc of the market within two years, he says.

But the combination of longer times between phone updates and their rising prices mean that Samsung will look for ways to create more “ecosystem” revenue, both for itself and for operators, he says.

What might this mean?

“It could be through other devices and ways of combining them,” he says.

“We’ve got partners who are using sim-connected smartwatches to drive incremental ARPU for them, and of course, new revenue. There’s a tangible opportunity in things like that.”

Asked whether this means that Samsung is looking for a similar arrangement with one of the operators for Samsung’s Galaxy Watch, Mr Kitto wouldn’t be drawn.

However, he said that it’s a “trend” across Europe that looks set to increase.

“It’s about providing new solutions, new capabilities for our customers,” he said. “What it has done in the UK is to present a pretty sizable opportunity for operators to sell customers a secondary connection, maybe for an incremental number of pounds per month, for the connectivity. For us, that means the hardware to go with it.”

Mr Kitto said that Irish phone users are “on a journey” in terms of the tech ecosystem, which is gradually moving to more premium, more expensive hardware.

“It’s like other European markets,” he said. “We’re seeing the average selling price grow here.”

But is that rise in how much we pay for our tech gadgets related to better, more developed products or simply inflationary costs and supply shortages? Mr Kitto insists that it’s the former.

“If you look at the recent launch of the Galaxy S23, we had as many as we needed for here,” he said of possible supply chain shortages. “No, it’s about how much more innovative these [phones] are.”

Samsung’s domination of the folding phones category is often seen as a proof point of the company’s innovation. Is that where Samsung’s premium category is ultimately headed? What does the company regard as being clearly its premium device now?

“They’re different form factors [the Z Fold For and S23 Ultra] but we’re committed to both,” said Mr Kitto.

Could its cornering of the folding market be a weakness? If no-one else is entering the folding market with any real competition, does it condemn the handset format to a niche that will never become the norm?

“I don’t think so,” he said. “We’ve sold over 600,000 [folding phones] in the UK and Ireland. That’s not bad at all. We always said that it would become 25pc of the market by 2025 and we’re right on track for that to be the case.”

Does Samsung see efforts to ban TikTok spreading to Chinese hardware manufacturers such as Oppo?

“I wouldn’t comment on that,” he said. “We welcome competition, though. We’ll always have a really strong offering, no matter who’s in the market.”