(Bloomberg) -- Samsung Electronics Co. is making the biggest change to its smartphone strategy in years by reorganizing around its big-selling Galaxy S and foldable Galaxy Z series of devices. The company plans to discontinue its Note lineup of stylus-equipped phones and instead distribute that capability across its portfolio while pushing premium foldables in its challenge to Apple Inc.

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“In the near term, our operation will focus on a two-track strategy: flagship S series in the first half of the year and innovative foldable lineup in the second half,” TM Roh, who took over as Samsung’s mobile chief two years ago, said in a rare interview. “We will keep this strategy until there’s another major breakthrough and we are working hard to make it happen.”

The world’s largest smartphone maker unveiled its latest Galaxy S22 lineup on Wednesday, equipping the Ultra model in the family with a stylus. This effectively recreates the classic Galaxy Note formula of a large-display handset with a stylus and comes months after Samsung opted not to release a new Note in August. The company bet on its foldables filling the void and saw the move pay off with its sales of the category growing several times over and raising its average selling price for mobile devices.

Samsung Beefs Up Galaxy Phone Lineup With Stylus, Bigger Storage

Samsung will focus on the premium segment as its growth engine and plans to expand the Note experience across its Galaxy hardware ecosystem, spanning tablets and laptops as well as phones, Roh said. Foldables will also grow into new categories and the company plans to add one or two new smartphone form factors to its lineup within the next three years, he added.

“Under the Covid situation, the smartphone industry raced through changes that might have previously taken a decade,” Roh said. “We are entering the second phase of market growth. There’s growing demand for high-end premium models as consumers are using smartphones longer and in more ways than before.”

The pandemic drove the smartphone market out of its stagnancy -- growth had plateaued and replacement cycles were growing longer -- and Samsung now sees people more willing to upgrade their phones to get better video calls, gaming and daily communications functions as they rely on their devices for work and play. Initial demand from carriers and partners for the Galaxy S22 phones is up by double-digit percentages relative to the prior year thanks to the new Ultra model, according to Roh.