Samsung hints at new products as it bets on AI to drive upgrades to its latest foldable phones

In a swanky downtown Paris hotel, Samsung Electronics’ mobile boss sat behind a suite of the tech giant’s latest products, ranging from foldable smartphones to the brand new smart ring — underscoring how the South Korean firm is looking to lock customers into its world of products to drive sales.

TM Roh is the man tasked with bringing Samsung, the world’s largest smartphone maker, into the artificial intelligence era.

In a wide-ranging interview with CNBC at that Paris hotel earlier this month, Roh laid out Samsung’s vision for Galaxy AI, its suite of artificial intelligence features, how the company is thinking about making money off software and about future products, such as mixed reality headsets.

These include features like interpreter, which can translate spoken language between two people, and the Notes app that can record audio, transcribe and summarize what has been said or noted down.

AI has become the key focus for Samsung this year, as the firm looks to drive sales to its premium handsets at a time when consumers are holding onto their phones for longer and remain cautious on spending.

“We are reinforcing and bringing more AI capabilities to our products. As consumers use more AI capabilities, they can actually feel the convenience and benefits they bring,” Roh told CNBC in Korean translated by a company translator.

“I believe strongly that these Galaxy AI, mobile AI are strong motivation and driver for purchase of new products,” he added.

“Galaxy AI is here” was the slogan plastered across posters at the location of the Galaxy Unpacked launch — the Carrousel du Louvre, a shopping center and events space near the famous Louvre museum in Paris.

It highlights Samsung’s marketing blitz to tell users that its phones now have AI capabilities, as it looks to fend off Apple’s AI push. The U.S. technology giant announced Apple Intelligence in June, but this set of AI features won’t start rolling out until fall, and there are many regions where it won’t be avaialable, such as in China.

Still, many analysts don’t expect these early AI apps alone to drive new phones sales.

Roh anticipates the technology will develop over the longer term.

“When you think about when first smartphones and the internet came to being only a handful of people … used smartphones and internet. But as they progress, as they become more advanced, they became more pervasive in day-to-day lives. And I think [the] same applies to mobile AI as well,” Roh said.

Revenue in Samsung’s mobile business has historically come from sales of various smartphones and other devices. This stands in contrast to Apple, which, on top of cashing in iPhone revenue, makes billions of dollars from its software and services.

That’s because Samsung’s phones run Google’s Android operating system, which means Samsung has less control of its software and of the ability to push its own apps. Apple meanwhile owns its proprietary iOS operating system.

Apple’s App Store and the Google Play Store are the two dominant app stores of the iOS and Android systems, respectively.

As it now embarks to infuse its own apps with AI, Samsung appears to be making a bigger push into software, including an upgraded version of AI assistant Bixby, which is due to launch later this year and is based on the South Korean company’s own large language model.

Roh said that users typically access different software on mobile through app stores. That might not always be the case with AI on devices, as the smartphone becomes more intuitive. That may give an opportunity for Samsung’s apps to become more prominent, and Roh said the company is bolstering its own apps.

“We’re going to advance our software and native apps. So we’re going to provide and enhance Samsung software and apps for consumers,” Roh said.

That still doesn’t answer the question of how Samsung will monetize those apps.

When asked about whether Samsung would introduce a subscription to its AI services, Roh said the company is “listening to the market and the consumers” and advice from different experts.

“Subscription can be an option, and it can mean the AI features can remain as a core technology to entice more consumers to buy the hardware. But whatever the direction will be, we’re going to make a wise decision for the sake of consumers and, at the same time, for the sake of Samsung Mobile’s businesses,” Roh said.

Samsung was one of the pioneers in foldable phones, introducing its first such device in 2019. Other companies have followed suit with their rival products since then.

Roh hinted there could be other pieces of hardware hitting the market in the future, as Samsung looks to broaden its ecosystem of products. He said that the hardware components required for foldable smartphones are improving, as is the relevant software.

Asked by CNBC whether Samsung would bring the foldable screens to other devices, such as tablets, Roh said, “At the time when the hardware completeness and software and content integrity, the ecosystem comes to full maturity, we’ll be forced to introduce very satisfying and very almost perfect foldable new form factors in new product categories.”

He did not specify what these new product categories for foldable screens could be.

Samsung also has a so-called mixed reality headset in the works. Mixed reality often refers to technology like augmented reality that is employed in headsets and allows digital images to be superimposed over the real world. Samsung, Google and chip firm Qualcomm struck a partnership to develop a mixed reality headset last year, but no updates about the device have followed since.

Mixed reality has been thrust into the spotlight with the launch of the Apple Vision Pro, the Cupertino giant’s first foray into the product category. Roh acknowledged that mixed reality devices are “one of the important devices that will usher in new mobile experience and new ecosystem.”

He remained tight-lipped about devices, but told CNBC that Samsung will announce a new “mixed reality platform” within the year. This is likely to be a software offering, according to Roh, though he declined to elaborate.