Samsung still leads segment, niche market awaiting Apple's possible entry

Zhao Ming, CEO of Honor, unveils the company's foldable smartphone Magic Vs in Shenzhen, Guangdong province, in November. (PHOTO PROVIDED TO CHINA DAILY)

Foldable smartphones are becoming a bright light in an otherwise cloudy smartphone market, and shipments of the handsets are expected to see continuous growth in the years to come, as more affordable models are rolled out to attract consumers, and foldable display technologies continue to mature, company executives and experts said.

The comments came as foldable smartphones are expected to see strong growth, with estimated annual shipments hitting 26 million units in 2023, according to market research company Counterpoint. The forecast is an extension of the robust trend seen in 2022, when the global foldable smartphone market was estimated to have grown 73 percent to 16 million units, from 9 million units in 2021.

In the future, I believe that 20 to 30 percent of smartphones above 5,000 yuan will be foldable smartphones, and this proportion will grow over time.

Zhao Ming, CEO of Honor

Jene Park, a senior analyst at Counterpoint, said the segment's strong growth defies current economic headwinds as the premium market shows resilience and steady demand.

On the significance of the foldables segment across the broader market, Park said: "Foldables bring not only fresh design to smartphones, but also more screen real estate. This is growing in importance with smartphone use expanding, especially across media, entertainment and work. Framing the growth in foldables, we see the premium market showing strong growth despite macro headwinds, with ultra-premium leading the segment."

Another market research company International Data Corp expects foldable phone shipments to reach 41.5 million units in 2026, with a compound annual growth rate of 38.7 percent from 2021 to 2026.

The significant growth of the foldable market has been led by Samsung with its Flip and Fold lineup, IDC said, adding that it expects the updated models will outperform their predecessors and grab more consumer attention in the category.

The commercial segment of the market remains ripe for utilizing foldables as two-in-one devices that can replace both a phone and a tablet, IDC said, while highlighting that although it still believes this use case remains a low priority, falling prices and new business use cases make the idea more appealing moving forward.

Anthony Scarsella, research manager with IDC's worldwide quarterly mobile phone tracker, said the launch of the Galaxy Z Flip4 and Fold4 in the second half of 2022 once again shined a spotlight on the entire category as Samsung continues to be the gold standard for foldable devices in the market.

"The launches from Samsung have brought incremental but critical improvements over their predecessors. The success of these devices should be a strong indicator of how foldables will evolve and capture consumers moving forward," Scarsella said.

Samsung said in November that the number of Galaxy Z Fold and Galaxy Z Flip smartphones sold for enterprise use had more than doubled year-on-year. From January to October last year, the number of foldable smartphones Samsung contracted to enterprise customers increased by 105 percent compared with the same period in 2021.

The ease of multitasking on a larger screen and the powerful app optimizations for foldable devices are helping drive adoption among enterprise users, Samsung said.

A consumer experiences a Huawei foldable smartphone at an outlet in Chongqing in April. (PHOTO PROVIDED TO CHINA DAILY)

Galaxy Z Fold4's expansive screen offers a larger working area, well suited to make the most of features from desktop computers. The tool for juggling multiple tasks, pairs of apps and a PC-like taskbar, enables users to manage, launch and switch between apps, all without interrupting work, Samsung said.

Chinese smartphone brands Oppo, Vivo, Huawei and Honor are stepping up their push to tap into the market. Since the end of 2021, Chinese phone companies have launched a series of foldable devices, which are key for them to expand their presence in the high-end phone segment.

Oppo, for instance, unveiled its latest flagship foldable smartphone Find N2 series in mid-December, as its latest push to tap into the burgeoning foldables segment.

Honor unveiled its latest foldable smartphone Magic Vs in November. Priced from 7,499 yuan ($1,087) in China, the Magic Vs will be Honor's very first foldable flagship product to debut in overseas markets, said Zhao Ming, CEO of Honor.

Zhao said foldable smartphones, which have witnessed rapid growth among all handsets during the COVID-19 pandemic, are expected to continue their rise in the coming years.

"In the future, I believe that 20 to 30 percent of smartphones above 5,000 yuan will be foldable smartphones, and this proportion will grow over time," Zhao added.

Vivo, the official smartphone sponsor of the FIFA World Cup Qatar 2022, also unveiled its latest foldable smartphone X Fold+ in September, which became the first official foldable smartphone in the 118-year history of FIFA. Vivo said its hinge allows the phone to fold flat or to be propped open at angles between 60 and 120 degrees, and the phone's screen should survive 300,000 folds.

Another smartphone brand Motorola, which is owned by Chinese tech company Lenovo, also made a big push with its foldable smartphone Moto Razr 2022. Starting from 5,999 yuan, it can be folded to the size of a wallet and fit in people's pockets or bags. Motorola said users can make video calls, send texts, take pictures and access their favorite apps without opening the foldable smartphone.

Huawei also unveiled its foldable smartphone Mate Xs2 earlier last year, which was the fifth generation of foldable smartphones it had unveiled in the past three years. The move was Huawei's latest push to revive its smartphone business, despite US government restrictions on the company.

In comparison to smartphone makers' optimism, industry analysts remain more conservative. "With almost 70 percent year-on-year growth estimated for foldables in 2022, the biggest question today is whether foldables will become mainstream anytime soon. Unfortunately, the answer is no," said Nabila Popal, research director with IDC's worldwide quarterly mobile phone tracker.

"To me, mainstream means volume, and volume is dominated by cheaper, sub-$400 phones. While it may be tempting for vendors to swoop in with lower selling prices to generate an initial boost in sales, I strongly believe that is not a good move — especially not at the expense of quality and user experience. Foldables should remain a niche and premium flagship device," Popal said.

According to her, vendors should focus on improving user experience, increasing confidence in the category and generating long-term growth.

"I believe foldables are the future of premium Android devices even if, as a whole, they are only expected to capture less than 3 percent of global volume by the end of our forecast period (2026)," Popal added.

The views were shared by Zaker Li, principal analyst with market research company Omdia's mobile devices team. Li said as more companies launch foldable smartphones, the diversity of designs and the use of new folding forms will increase.

However, since foldable smartphones are expected to occupy the highest position in the smartphone lineups of all manufacturers in the future, the possibility that foldable phones will become a mainstream market in the future is very low, according to Omdia.

Park from Counterpoint said three key things must happen before the foldable smartphone sector sees any significant sales volume, namely, significant price declines with flagships at around $1,000-$1,500, more vendor participants and Apple's entry into the space.

The first two points are happening. "The latter is an important milestone as Apple is known to be extra cautious on costs and component sourcing. A foldable iPhone is a nod to the robustness of the technology," Park added.