Samsung Electronics Co., Ltd. (A005930) Earnings Call Transcript & Summary

Ladies and gentlemen, please welcome to the stage, Head of U.K. Mobile Product Marketing, Rebecca Hirst.

Hello, everyone, and welcome to Samsung Galaxy Unpacked. Last year, right here in San Francisco, we added a whole new dimension to the smartphone experience with the revolutionary Galaxy Fold. The Fold was more than a new device. It was the first entry in an entirely new era of smartphone history. Today, we're taking another giant step forward. We're changing the shape of the future with the Galaxy Z Flip. As I'd call it, the zed flip. Smartphones are a part of our everyday lives, but this is no ordinary smartphone. It changes everything, our phone's shape, size and the very way we use it. That's what innovation, true innovation is all about. The Galaxy Z Flip is a statement smartphone. It's the trendsetters and trailblazers. It's like nothing you've ever experienced before in a new perfectly compact form factor. This device is an icon, a standout smartphone for people who want to stand out. And it all starts with a playful premium design. Let me show you. When it's closed, it is a thing of beauty. It's smooth and sleek and symmetrical. And at half its full size, it fits right in my palm and snugly in my pocket, and the cover display shows me all the information I might need at a glance. When I'm ready to use it, all I have to do is flip it open and I get a full-sized, 6.7-inch screen with hardly any bezel, the ultimate immersive experience for the ultimate smartphone. And the color is just as stunning. Look at how it gleams whether I keep the phone open or closed. The Galaxy Z Flip comes in 3 gorgeous colors: mirror purple, mirror black and in select countries, mirror gold. Oh, you like that one. These stylish colors change when the light hits them so you'll always be catching attention and turning heads. And when closed, it lets you disconnect without missing out. You can check the time, get notifications of a text, alarm or a call. All the essentials are right there on the cover display. You can even take a selfie without opening up the phone. Just hold out the rear camera and use the cover screen as a viewfinder. With this phone, we've done the impossible and created ultra-thin glass that folds. Now you might think that a foldable glass would be brittle, but this glass is built to last and it protects your screen from scratches. It's so durable, you can fold and unfold your phone over 200,000 times. Now every time you fold it, you're not just bending glass, you're bending the laws of physics. You can see for yourselves, this phone and its display are like nothing ever made before. Unfolded, the Galaxy Z Flip puts entertainment in your hands with a cinematic screen. And with the world's first hole-punch camera in a foldable display, you get the same sprawling expansive screen you've come to expect from Galaxy smartphones. And as an added bonus, we're giving Galaxy users access to YouTube Premium. So it's beautiful when it's closed, it's beautiful when it's open, but what about everything in between? We built a Free Stop hinge so it can stay open at different angles just like your laptop. We call it Flex Mode. In the Flex Mode, you get a new kind of smartphone experience. Your screen is split into 2 parts, a viewing area and an interaction area. And we optimized some of your favorite apps for this so they'll automatically adjust. For example, if you're watching YouTube and you want to leave a comment, you can watch on the top half of your screen and comments on the bottom. You can even prop your phone up by itself and video chat or take a selfie hands-free. Let me show you. So I'm going to take my phone out of my pocket and prop it here on the podium and we're going to take a selfie. So open the camera up, and ready? Cheese. Let's see if my eyes are actually open in this one. So I go down to the -- open the Gallery app and you'll see I can scroll across the bottom half of the screen where some of my other pictures are saved. So here, you'll see there's more of animals than there are of people, but that's just my life. You can see for yourselves, we custom-built a whole new mobile experience to take advantage of this unique form factor. And Flex Mode changes the boundaries of what's possible. Just imagine, you'll be able to take a night Hyperlapse video without a tripod like the one you see here. We pushed mobile engineering to its limit to create this device and none of it would have been possible without our new one-of-a-kind Hideaway Hinge. Oh yes, the hinge is the backbone of any folding phone. It quite literally holds the whole thing together and it also prevents particles like dust and sand from getting into the phone and damaging the display. Now that's because folding phones have a tiny, tiny gap between the hinge and the device. We created a layer of fibers inside that tiny gap to keep the particles out. This secure fiber shield protects your phone so you can make the most of this revolutionary technology. We are so proud of the Galaxy Z Flip. It is a unique piece of technology, one that changes the smartphone experience entirely. Take a look. [Presentation]

The Galaxy Z Flip is a new kind of device to kick off a new decade of Samsung innovation, and we can't wait to see what you do with it. It can be yours from February 14 and it's available starting at $1,380. We have a lot to show you today and we are just getting started. And because this is Unpacked, we're doing it in style, literally. We've teamed up with one of the biggest names in fashion to bring his signature style to the Samsung Galaxy. We're not just creating a new look. We're showing how high fashion and high tech go hand-in-hand. And only one person could lead this disruptive collaboration, Thom Browne. [Presentation]

Thank you. I'm very excited to be working with Samsung on this new project. For decades, Samsung has pioneered innovations in mobile technology, creating a world of its own, always moving forward. You sense a really strong collaboration because you understand the experience of the 2 worlds in the attention to design, the attention to technology and in creating something that is truly timeless. With this device, our worlds meet, bringing together fashion and technology in a unique mobile experience. We have created something truly special, and we look forward to sharing it with you. And there's more to come during tomorrow's special event in New York. [Presentation]

The name Thom Browne is synonymous with style. He's made a career by pushing the boundaries of what's possible, just like Samsung. It's the perfect partnership and we're excited about this limited edition collaboration. You'll hear more about this partnership tomorrow straight from New York Fashion Week. But first, we have so much more to tell you about the next decade of Samsung innovation and the incredible technologies that will shape our lives in the years to come, and that starts right now. [Presentation]

Ladies and gentlemen, please give a warm welcome to President and Head of Mobile Communications business, Dr. TM Roh.

Thank you, and welcome to Galaxy Unpacked 2020. It's amazing to be here with you today to kick off a brand-new decade of growth and change. We started 2020 with a renewed momentum, great confidence and a deep sense of excitement about the opportunities in front of us, opportunities that begin right here, right now as we launch our new era of mobile innovation. Innovation that is more meaningful and personal; innovation that is more private and secure; innovation that will create more intelligent connections across devices, people, businesses and communities. I know I speak for everyone at Samsung when I say it's an incredible time to be at the start of this change to drive growth for our industry and to provide meaningful progress for consumers. I am so honored to lead the Mobile Communication business at Samsung. And I will not be where I am today without my mentor CEO, DJ Koh. Thank you, DJ, for your ongoing leadership. In my time at Samsung, I have led the development of many of the key breakthroughs in our most innovative and successful Galaxy devices, starting with the first Galaxy S. Throughout our history, we have been guided by our belief in innovation that improves our customers' lives and driven by our passion to overcome technology's most difficult challenges so we can deliver experiences that create a better world. We have never been afraid to stand at the cutting-edge of innovation or be the first to introduce devices that drive this industry forward. This is why in 2011, when we heard that consumers wanted a more powerful, more productive device, we combined our largest screen with the S10 and launched the Galaxy Note. This is why last year, when we heard that consumers wanted more multitasking, even bigger screens that would still fit in their pocket, we reimagined the future of mobile experiences by launching the Galaxy Fold. And it is why when we saw a future of high-resolution images, high-definition video and gaming on-the-go, we pioneered the key investments that make 5G possible today. Thank you. With its high speed, low latency and massive capacity to connect millions of devices, 5G brings the transformative power to enhance everything people can do with their phones. And now Samsung is making 5G available to more people, more quickly than anyone thought possible. So today, we are excited to show our next big step forward as we launch a new generation of intelligent connections. It begins with our vision to be the innovator of new mobile experiences that flows seamlessly and continuously wherever we go. To realize this vision, we are driving the convergence of the 3 most important technology over our time, 5G, AI and IoT. Samsung is in a unique position to bring the benefits of this convergence into consumers' lives. With more than 1 billion smart devices, including Galaxy phones, wearables and PCs, we already help hundreds of millions of people around the world enjoy more connected and convenient lifestyle. With the Samsung Knox, we set the standard for security and trust for this industry by delivering end-to-end multilayer protection that starts with a security chip built directly into the device. And with open collaboration, we have partnered with the industry leaders to build an ecosystem that is unmatched in scale to provide game-changing mobile experiences. Today, we are so proud to introduce the newest member of Galaxy family. A new phone named for the start of a bold new decade of change, a phone that says goodbye to the camera you know today and hello to a new way to see and share the world in its best light with the intelligence that learns your life and optimizes to how you use it, a phone that create awesome experiences with a -- your favorite music services and entertainment options, a phone that offers the full power of 5G across all new devices. This is just the first step toward a new generation of meaningful mobile experiences. And now it is my great pleasure to introduce the brand-new Galaxy S20. [Presentation]

For all of you joining us online for the first time ever, Unpacked is being captured and streamed with the amazing Galaxy S20. Thank you. Thank you. Thank you.

Ladies and gentlemen, please welcome to the stage, Head of U.S. Mobile Product Management, Drew Blackard.

Great to be here in San Francisco. Last month marked the start of a new decade. And at Samsung, we are really looking forward to the next 10 years of Galaxy innovation. With that in mind, we've been working hard to create devices that are built for the way that we live our lives today. Our vision for the next decade of Galaxy all starts with 5G. Just last year, we unveiled 5 new 5G smartphones worldwide. In Korea alone, we helped bring 100,000 base stations online and we've engineered new 5G chipsets that are smaller, cheaper and power-efficient. 5G will completely change how we communicate, how we game and how we keep in touch with the world around us. It will work with AI to enhance every aspect of our smartphones and it will connect thousands of devices through our SmartThings platform while protecting our privacy. And last year, we were just getting started. Simply put, this is the year of Galaxy 5G. It begins right now in 2020, right here with the Galaxy S20. Today, we're more social than ever and we communicate and express ourselves with images, not just words. That means our smartphones need one thing above all else, a powerful camera. We spent months asking thousands of smartphone users across the world when it came to camera, what mattered most. And no matter who we asked or where they lived, we got the same answer: quality, quality, quality. Now we can all take great photos under perfect conditions, bright outdoor lighting, not too close, not too far, not too much movement, but in practice, it rarely works out that way. We take pictures at concerts, at kid's soccer games, at graduations. And we want to be able to capture those moments perfectly too, even if the conditions aren't perfect. After all, it's 2020. We rely on our phones to document and share our entire lives. So we rebuilt the Galaxy S20's entire camera system to change the way we capture. The key to capturing a high-quality photo is a high-resolution camera because the higher the resolution, the more detail you can capture and the more you can see. Maybe you're taking a picture, you noticed something interesting in the background so you pinch in to get a better look, but as you get closer, the image gets pixelated. At 64 megapixels, S20's revolutionary camera system takes smartphone photography to the next level. So when you need to crop an image, don't worry. S20's resolution is so sharp that even when you do crop, your photo remains crisp and clear. Of course, high resolution isn't just useful for viewing pictures. It's also useful when you're taking them. When you need to get closer or want the subject to be the only thing in the frame, you need the zoom. And with Galaxy S20's Space Zoom, you can get up to 30x closer. So if there's something that's cool from far away, you can still zoom in, get a high-quality shot. Samsung cameras are the best in the business not just because of the game-changing hardware, but because of their intelligence. With AI, you can use this revolutionary camera to the fullest. Think about it. There's those times when you want to capture the moment, but by the time you decided on the right camera mode, the moment's gone. With Single Take mode, S20 uses AI to capture different versions of that exact same moment, using each of its different cameras. Just take a short clip, up to 10 seconds, and Single Take captures different versions of that game-winning goal, Live focus, boomerang video, ultrawide and a lot more. Then when you're done shooting, it gives you a handful of those best shots so you can pick your favorites. My wife and I are really excited about this one. We've got 14-month old twins at home and they never sit still for a photo. So now we'll never have to worry about missing the moment. And your Galaxy S20 uses AI to make it even easier to keep your photos organized. It groups your content, making your gallery easier to navigate, and also lets you create subgroups to organize your photos however you want. You can easily search your photos. And if you identify people that keep popping up, S20 will be able to pick them out automatically. With the Galaxy S20, we've created a phone that will change photography, but we know that photos are only one part of the camera experience. More and more, we're using video to communicate, whether it's sharing through our Instagram Stories, capturing special moments or creating content of our own. For years, Samsung has led the market in 8K TV technology. And today, we're bringing that expertise to mobile. Thanks to S20's super-high resolution, you can capture videos in stunning 8K. That's right. 8K is the future of video, and now you can shoot it yourself right from your phone. In fact, we've built an entire 8K ecosystem. You can shoot 8K footage from the camera in your pocket, upload it to YouTube over a 5G network and use Tap View to cast it to your 8K QLED TV. That way, you can enjoy your high-quality video right on the big screen. From capture to casting, from your phone to your TV, it's a full 8K experience. To truly understand how this 8K ecosystem comes together, you've got to see it for yourself. So with the help of filmmaker and adventurer, Sam Evans, let's take a look.

Hey, everyone. I'm Sam, and I'm a content creator from Australia. I'm here in the product demo zone to show you exactly how the S20 works. So you've already heard a lot about it, but you really have to see it in action. Actually, you already have. Do you remember the video you saw earlier, the one with the cable cars and the Golden Gate Bridge moving through San Francisco? I actually shot that whole film on the S20. I'm so amazed by what this phone can do. So I've traveled around San Francisco with the S20 and managed to get some pretty incredible footage. For me, 8K footage is a game-changer. With the extra resolution, it allows me to edit my footage exactly the way I want. Here's some 8K footage I captured out of San Francisco. Looks great, right? And worth sharing, don't you think? That's super easy. I can share with my friends by uploading it directly to YouTube without losing any of the original quality. I already uploaded some 8K footage to show you how it looks. Using the YouTube app on an 8K QLED TV, we can watch it there. Let's check it out. So cool. Capture a moment in 8K, share it with your friends, watch it together, all through the S20. Check it out for yourself. After the show, come on down to the product exhibit zone and see it for yourself. Thanks, everyone. Back to you, Drew.

Thanks, Sam. 8K video is stunning. The best quality for your best memories. It takes smartphone recording to a whole new level. And it opens the door to some entirely new experiences that have never before been possible on a smartphone. Record a video then scroll through the footage to find the perfect moment, and with a single click, you'll get a 33-megapixel still photo with amazing resolution. You can crop any frame and always get a high-quality picture. With 8K, S20 revolutionizes your photo and video experience. And it's designed for pro-grade filmmaking. With Pro mode, you can adjust aperture, exposure and settings that you'd usually have control over with a DSLR. We even enhanced Super Steady mode so you can take sharper videos on the go, thanks to AI motion analysis and an anti-rolling stabilizer. This camera isn't just good. It's in a class of its own, right down to its performance specs. We've got a powerful processor, an all-day battery. And thanks to the Galaxy S20's incredible storage capacity, up to 1.5 terabyte using a Micro SD card, you'll have plenty of room for all your favorite photos and videos. And you can share those photos and videos more easily than ever, too. With S20, you can share files with up to 5 friends at the same time without even having to pair your devices. Every incredible innovation you've heard about so far from 8K video, to Pro mode, to sharing, is available on all 3 models of the Galaxy S20 Series because we don't believe in compromising when it comes to camera quality. And for the people who want even more, the serious professional photographers who need the best of the best, we're proud to introduce the Galaxy S20 Ultra. This device has the largest, most powerful image sensor we've ever put on a smartphone. You want high resolution? It has an unbelievable 108-megapixel AI camera so you can capture scenes with a level of detail you've never experienced. With a camera this high quality, you don't just get one picture. Zoom in any one part and a new world comes to light. You practically get a photo album's worth of detail in a single shot. We rebuilt the entire camera system with brand-new sensors to help you focus quickly and accurately. The S20 Ultra takes multiple frames using software along with hardware to merge them all into one high-quality photo. And it does it all in tenth of a second, much faster than any smartphone out there. This technology, combined with the Bright Night sensor, means you'll get bright, accurate pictures even in low light. All 3 models of the S20 take amazing low light photos, but the S20 Ultra takes it even further. This one takes some of the best and brightest photos I have ever seen, that's because Samsung's pioneering nona binning technology combines 9 pixels into 1, all at the sensor level using AI. That just means that each pixel is larger than ever before and can capture 3x more light in every image. S20 Ultra comes with an advanced cutting-edge zoom function. See, for camera zoom, you usually need more focal length, which means a bulkier device. But when it comes to smartphones, that isn't a great option. You want the device to stay as thin as possible. So we built it with a folded lens. When the light enters the tunnel lens, it's refracted at an angle, producing a powerful zoom effect. The folded lens allows for up to 10x Hybrid Optic Zoom. Now multiply that with the 10x digital zoom and you can magnify a shot up to 100x. That's what you'd expect from a telescope. To show us just how powerful the S20 Ultra zoom is, we invited Colin and Samir to try it out for themselves. Here, let's check it out.

What's up, everyone? I'm Colin.

And I'm Samir. And we're coming to you here at Hawk Hill. Now we've been making YouTube videos and telling stories together for a long time. And we shot our first video over 8 years ago.

And as we've evolved as filmmakers and storytellers, our gear has evolved, too. Today, we travel around with bags, big cameras and bulky lenses. But at the end of the day, the story is what matters most. And we need a versatile camera that can travel anywhere with us and capture it all.

That's why we're so excited about the Galaxy S20 Ultra. Okay. So check this out. We're going to shoot this scene right here on the ultrawide mode. So right here is one of the best views of San Francisco. You got the city in the background. You can see the Golden Gate Bridge. And over there, that tiny dot on the left side of your screen, that's Alcatraz.

Okay. You're telling me that dot is Alcatraz.

Yes, that's exactly what I'm telling you, Colin. That is Alcatraz.

If you're so sure, prove it.

Okay. Well, I'm going to get you closer and I'm going to prove that to you. Okay. You ready?

I'm ready.

Check this out.

Wow. That's incredible. That's Alcatraz at 30x zoom.

So that tiny dot in frame that I just showed you now fills the entire screen. Let me show you where we started from.

Wow, unbelievable. Now normally, to get a shot like that, we would have to swap lenses.

But now we can get this ultrawide you're looking at as well as that close-up, all with a single device.

Samir, I've got a question for you.

What's up, Colin?