Samsung unveiled the Note 8, it’s second flagship of 2017, and the first new Note device since the Note 7 recall.
Notable features include:
- Dual 12MP rear camera, with both cameras featuring optical image stabilization. Samsung opted for a f2.4 x2 telephoto alongside f1.7 camera.
- 6.3” OLED "infinity display" with a 18.5:9 aspect ratio.
- S Pen stylus, with live translate feature.
- “Live message” which enables animated messages, and is compatible with leading messaging apps including Whatsapp and WeChat.
- Same dual chipset strategy as S8, i.e. Samsung Exynos for most markets / Qualcomm Snapdragon in US, China and Japan.
- LTE Cat-16
- 6GB of LPDDR4 memory, 64GB storage.
- IP68 water and dust resistance.
- Compatible with Google Daydream VR and Samsung Bixby.
- Available internationally from September 15.
The Galaxy Note 8 demonstrates Samsung’s confidence in its design expertise because of the strong similarities between the Note 8 and the Galaxy S8 and S8+. Samsung is correct to iterate the S8 design because of the success the S8 has enjoyed in shipment volumes.
Samsung’s decision to launch the Note across all regions means the Note 8 should be the most successful Note smartphone for at least three years. The last model, Note 5, did not launch in Europe. Back in 2014, the Note 4 and Note Edge shipped 9.8m in the fourth quarter which represented 14% of all Samsung’s shipments. But because of the more limited geographical launch and rising numbers of large screen smartphones from all OEMs, the Note 5 shipped just 4.4m in its most successful quarter, representing just 5% of Samsung shipments.
Calculated risk to re-use signature Samsung smartphone brand
The Note range is a symbol of Samsung innovation and is strongly differentiated from other smartphones because of its integrated S Pen and optimized stylus-friendly software. For many years, Samsung was criticised for following Apple and others, rather than being an innovation leader. The launch of the original Note in 2011 changed perceptions forever, as Samsung anticipated and led the move to very large display smartphones and became the leader in stylus-based modern smartphone experiences as well as in the “phablet” category.
The continued use of the Note branding after the dramatic recall of the Note 7 in 2016 is a calculated risk for Samsung. In Korea, Samsung has tested the ongoing appeal of the Note name through the launch of the Note Fan Edition this spring, where it re-packaged Note 7 hardware combined with a smaller battery. In other markers, Samsung has relied on market research. But Note smartphones are one of the most differentiated parts of Samsung’s mobile portfolio and are a category clearly Samsung wishes to continue to own.
Unique stabilized telephoto camera
The dual rear camera with dual optical image stabilization (OIS) is an industry first for Samsung and is the heart of Samsung’s positioning of the Note 8 as a technology leader. Most handset OEMs have opted for a combination of mono and RGB color sensors with their dual cameras, aiming to offer background blur and improved low light performance.
Samsung has taken the harder approach of delivering a telephoto camera but one which is more useful for consumers. Apple is the notable other OEM with this design, but unlike Samsung, Apple chose not to include OIS in its telephoto lens which makes the iPhone 7 Plus camera best used in bright lighting. The risk for Samsung is that the imminent new iPhone due for launch in mid-September matches the new Note 8’s OIS capability.
Innovative software complements the industry leading camera hardware in the Note 8. Samsung offers a dual capture mode, where the camera will record photos using both telephoto and wide angle lens at once, saving users from having to choose ahead which lens to use. The extent of the background blur can be adjusted after a user has taken a photo, like Huawei’s P10 model, but unlike Apple’s iPhone 7 Plus.
Dramatically expands the market for Google’s VR
Samsung continues to pursue a dual track VR strategy, similar to Samsung Mobile’s historic approach in many technology choices. It continues to work with Facebook-owned Oculus on its Gear VR headset and also supports Google’s Daydream VR with its smartphones.
Google’s Daydream VR platform has been held back by the number of shipping smartphones which support it. This is because the low persistence OLED displays needed have been in very short supply and most handset OEMs have been unable to secure adequate volume supply. Samsung is the exception, because Samsung is one of the leading OLED manufactures, and Samsung Mobile has long offered OLED panels as standard on its flagship models.
Note 8 will dramatically increase the addressable market for Daydream VR because the Note 8 will be compatible out of the box. Previously, Samsung offered support on the Galaxy S8 and S8+ but only through a software update which became available in summer 2017, and because of the need for operator certification, that update takes time to roll out to S8 owners.
Note 8 is a tremendous technical achievement, not conservative
While for Samsung, the Note 8 hardware design may seem conservative, for every other OEM the Note 8 would be an astounding technical achievement that almost all no other OEMs is yet able to match. Only Apple has comparable research and development resources to Samsung.
Samsung has delivered a very compact yet very large screen smartphone, with a stylus as well as water dust resistance, and combined with CAT16 “gigabit LTE” connectivity, dual rear camera with OIS, a high resolution 18.5:9 display, and Bluetooth 5. Other handsets have some of those features, but there are no other handsets currently available with all of them.
Samsung to push flagship smartphone category past the $1000 price point
As Samsung adds new display, camera and computing capabilities to the new Note 8 smartphone design, IHS Markit expects the Note 8 Bill of Materials (BOM) cost will exceed those of all previous generations of Note models from Samsung. IHS Markit teardowns of previous models highlights progressive increases in material cost going into the Samsung devices with the Note 7 representing one of the largest increases in BOM cost.
Extrapolating from the Note 8 specifications, IHS Markit estimates the BOM cost for the Note 8 to be well over $300. This would equate to a retail pricing of nearly $1000 given similar gross margin assumptions.
As the smartphone industry enters a super cycle with novel new display and gigabit LTE designs, IHS Markit anticipates the trend for price increases in premium smartphone models will continue as OEMs continue to look for design differentiation at the upper echelons of the product category. However, OEMs are taking a risk because they are yet to confirm whether there is enough price elasticity in the market for these premium smartphone designs. If there is not, consumers will either choose cheaper smartphone models or hold off on smartphone purchases.