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Devices/smartphones

Three Reasons Why T-Mobile Isn't Going to Sell the Galaxy Fold

Samsung will begin selling the industry's first folding phone, the Galaxy Fold, in the US starting Friday. AT&T and Best Buy will sell the gadget, but T-Mobile is conspicuously absent from Samsung's list of Galaxy Fold retail partners.

That's noteworthy considering T-Mobile was among the operators that initially had planned to sell the Galaxy Fold in the US, back in April. That was before Galaxy Fold reviewers found widespread problems with the gadget's hinge, which sparked vendor Samsung to delay the release of the device in order to reinforce its folding mechanism.

Now, though, Samsung believes the Galaxy Fold is ready for prime time, and has said it will be available to actual customers this week -- although the company is urging customers to "just use a light touch" on the device.

However, Samsung wasn't able to keep T-Mobile in the Galaxy Fold fold. "T-Mobile will not carry the Galaxy Fold because we already offer customers a wide range of the latest smartphones," the operator said in a statement in July, in explaining its decision not to sell the Galaxy Fold in its retail stores or on its website. The carrier was not listed by Samsung as a retail partner for Friday's launch.

This comes as a bit of a surprise given that T-Mobile sells a wide range of phones, including those from OnePlus and Google. Moreover, the introduction of new, fancy phones often stands as an opportunity for operators to steal customers away from each other -- take for example Verizon's deal with Google for exclusive rights to sell the initial Pixel, or even AT&T's initial five-year deal with Apple for exclusivity over the iPhone. Such agreements almost guarantee that an operator selling the latest and greatest will gain the customers who are looking for the latest and greatest.

To be clear, customers who want the industry's first folding smartphone will be able to put the Galaxy Fold onto T-Mobile's network. They can do so by purchasing an unlocked Fold at full price and then sticking a T-Mobile SIM card into it. But they won't be able to buy the phone using T-Mobile's EIP (Equipment Installment Plan) payment plan.

So why did T-Mobile dump the Galaxy Fold from its phone lineup?

1. It's too expensive
As noted by BayStreet Research founder Cliff Maldonado, T-Mobile's customer base has become more sensitive to smartphone price tags, particularly as vendors like Apple and Samsung move above the $1,000 threshold.

Samsung's lengthy press release on the pending introduction of its Galaxy Fold makes no mention of the gadget's cost: a whopping $1,980.

Indeed, Maldonado noted there are growing indications that some Americans simply see no value in super-expensive phones. He said T-Mobile barely stocked any iPhone 11 Pros at launch on Friday (a gadget that starts at $1,000) because the operator knows its customers won't buy the phone given its price and the corresponding large down payment required to buy it on the operator's EIP.

2. Customers might not like it
Operators like T-Mobile conduct extensive testing on the phones that they sell, in part to avoid selling gadgets that will inevitably be returned to stores by unhappy customers. Customers who return their phones, for whatever reason, often put a strain on operators' retail logistics, incurring additional costs in terms of repairs and manpower.

Thus, phones that might break at higher rates -- like, ones with a hinge -- might create too many problems for operators' front-line employees.

3. Folding phones might just be a fad
Remember 3D phones? Around 2011, vendors like HTC, Amazon and LG hoped that 3D displays -- phone screens that could show blurry, three-dimensional images -- would take the market by storm. Fast forward a few years and that fad fizzled out more quickly than even the most skeptical industry analysts had expected.

Folding phones may well follow a similar pattern. Even though Huawei and LG appear to be following Samsung into the folding phone arena, there's no telling how customers might react to the gadgets. In two year's time, there's a good chance folding phones will follow 3D phones into the industry's cell phone graveyard.

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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