Samsung might be happy losing money on every Galaxy Z TriFold unit sold

Samsung, like any other company, does business to generate profit. You wouldn't expect the company to sell its products at a loss, but there's a possibility that it may have very slim margins or may even be losing money on every Galaxy Z TriFold unit sold so far.

This isn't a bad business decision from the company. Samsung wants to showcase its technological prowess at this stage, which is probably why the Galaxy Z TriFold's release has been so limited in scale.

Samsung has confirmed that the Galaxy Z TriFold is only going to be released in South Korea, the United States, United Arab Emirates, China, Singapore, and Taiwan. Pricing varies from around $2,500 in South Korea to over $3,000 in the UAE.

It's not uncommon for pricing for products to vary across different markets due to the prevailing dynamics, including currency rates, taxes, duties, and more. However, such large differences between markets as noticed with the Galaxy Z TriFold are certainly unusual.

Samsung's decision to price the Galaxy Z TriFold at 3,590,400 won in South Korea might reveal what it's trying to achieve. It's been priced very precisely down to the last 400 won ($0.28), suggesting it arrived at this number either to just about break even on the device or even to sell it at a loss in its home market and make up the difference elsewhere like the UAE, where the Galaxy Z TriFold is the most expensive.

The device has quickly sold out wherever it has been released so far, largely because Samsung is only making it available in small quantities. According to reports, Samsung has only sold between 3,000 to 4,000 units so far, and it expects to sell around 30,000 units in total.

A wider release would undoubtedly have required more funds for marketing and promotions, in addition to more investments in ramping up the production. Samsung probably knew that it can't hit the numbers that it would need to be in the green with this device at this stage.

The better strategy would be to go for a limited release that keeps an aura of mystery around the device, relying on scarcity to drive its appeal alongside the technological advancements.

It's also claimed that the demand even at this higher price tag has been stronger than Samsung expected, but scaling up production of this device isn't as simple, particularly not when component prices are rising fast.

This is in stark contrast to how it sells other premium devices. For example, this year's Galaxy Z Fold 7 and Z Flip 7 pre-order volume was more than a million units. It routinely does more than that for the Galaxy S series every year.

There's little incentive in ramping up production when the margins just aren't there. Samsung has extracted what it wanted from the Galaxy Z TriFold. It has shown to the world that it's capable of making a tri-fold phone, something that not many other companies, especially not one based outside China, have done as yet.

Samsung hasn't been distributing Galaxy Z TriFold units to media outlets either, like it does for most of its other premium devices. Reports mention that this a tightly controlled device that's primarily meant to showcase Samsung's market leadership and engineering capabilities, rather than to generate profits through volume.

The company has stick with the go-slow approach here because the Galaxy Z TriFold doesn't have any major competitors. Indeed, there are some Chinese tri-fold phones, but they aren't available in the United States. Devices like the Huawei Mate XTs still can't natively access Google's apps and services due to the ban, which doesn't make them a compelling option for a customer spending so much on a phone.

Samsung will ultimately want to make the Galaxy Z TriFold a mass market product, but we may have to wait for a while until that happens. Whether that happens with this particular model or its successor which may not arrive for more than a year is anybody's guess.

For now, it will be happy with what it has achieved. Even if the Galaxy Z TriFold is a loss-leader product right now, it plays the role meant for it to perfection.