Apple's competitors are doubling down on the Foldable Smartphone form factor to Challenge Apple's Dominance in the Premium Space
This week International Data Corporation (IDC) provided a forecast for foldable smartphones reaching 48.1 million units, wih a market value of $42 billion by 2027, as the chart below highlights. In 2023 21.1 million foldable smartphones, large-fold and flip phones, are expected to ship.
(Click on chart to Enlarge)
Anthony Scarsella, research manager, Mobile Phones at IDC: "The foldable phone market finished slightly higher than previously forecast as consumers start to embrace the new form factor. A 10% decline in ASP helped the market grow 75.5% in 2022, as foldable devices became more affordable in numerous markets. With new vendors and models joining the race this year, we expect the foldable market to be the one bright spot in 2023 with 50.5% growth, while the total general smartphone market contracts 1.1%." for more, read the full IDC report.
The key to Scarsella's commentary is that foldable smartphones shipments are gathering momentum in the market as this form factor becomes more affordable. With Apple rumored to be considering a new premium tier of iPhone, such as the iPhone Ultra," the elevated price(s) will open the door for foldable devices by Apple's competitors, especially China, to offer better value than an iPhone in terms of hardware.
This makes the Samsung event in August a possible pivotal point for the foldable smartphone sector should their new Galaxy Fold X be priced on par or even under an iPhone Pro (or Ultra). The foldable display on Samsung's current foldable is stunning and at the right price, it's going to be tempting for many that are not overly committed to Apple's ecosystem. Of course die-hard fans will never switch and that's totally understandable.
On March 27th, Patently Apple posted a report about Apple's iPhone 13 was China's #1 smartphone in 2022 and the fact that OPPO, Vivo and Xiaomi formed an alliance allowing users to easily transfer data between their brands. The South China Morning Post stated that the alliance was designed to challenge Apple’s popularity in the country.
Not only are the alliance members focusing on easy data transfers, they're also joined by Huawei in rapidly advancing foldable smartphones, developing an advanced supply chain determined to deliver thinner, better foldables that could challenge Apple in the premium space where Apple currently rules.
A new report by 36Kr claims that at present, the top three brands in terms of market share are Huawei, Samsung, and OPPO
He Gang, COO of Huawei Terminal, told reporters in a recent interview: "Many of the thinness and lightness of the folding screen are related to materials. For example, our Mate X3 this time uses new materials, and it is also made progress on reducing the size of the hinge. Obvious weight reduction and thinning design” is crucial with consumers.
"There are no screw used in the connection of the parts of the entire hinge, which reduces the number of hinge parts from 136 to 100, and the screws are replaced with zinc alloy," said Zhou Yibao, product manager of OPPO N2. It weighs 0.015 grams, and the 64 titanium alloy screws in the whole machine reduce the weight by about 1 gram.”
And while the supply chain for foldable phone components is rapidly growing and advancing, there are still many problems that need to be solved. Yet advances are coming to foldable phones this year including displays with 120Hz refresh rate and even dynamic adaptive refresh rate which is great for gaming.
At present, Samsung has 73% of the foldable display business, BOE has 18% and Vinoxin has 8%. The new products of Samsung, vivo, OPPO, Xiaomi and Huawei all use Ultra Thin Glass (UTG) as the screen cover. For more on this, you could read the full detailed report by Korea's 36Kr.
As the report pointed out, there are many problems that still need to be resolved in the supply chain before OEMs could go full tilt, especially chasing Apple's premium smartphone dominance. Unbeknownst to the general public, Apple is silently working on a future foldable device (iPad and/or iPhone) as their many patents point out, with their latest covering a motorized hinge. One of the patent images is presented below.
So while Apple is likely to be last to the party, a premium foldable iPhone from Apple would likely sell more units than all their competitors combined in single quarter after it's release. Innovation isn't based on being the first OEM to market with a new form factor and Apple is likely to prove that out once they step into ring with their competitors.
While I wasn't impressed with foldable smartphones out of the gate, I'm definitely warming up to this form factor. When I saw Patently Apple patent figures in our reports on the latest Samsung folding phone, I was floored at how vastly superior the figures were presented in contrast with my iPhone. So there's no doubt in my mind that the foldable form factor is going to be a much bigger winner than some forecast. It will all come down to price.
For those that are patient, a foldable iPhone is likely coming our way over the next few years. The top Chinese OEMs and Samsung will continue to drive the price down for their foldable devices that will at some point in the not-too-distant future, put pressure on Apple to join this segment of the market.
At Samsung's upcoming event in August we're likely to witness further price cuts to their foldables to tempt consumers who only purchase the top premium phones of the day. Samsung hasn't been able to mount a worthy challenge against Apple in the premium smartphone space. In fact, it must be embarrassing for them to not be able to even make a dent on that front. Their next-gen Galaxy Z Fold could be that vehicle to challenge the iPhone Pro, if they set prices aggressively.
The next-gen Huawei Mate X3 presented above goes on sale in May at US$1900, according to the Verge's March 23 report. Huawei's specs and highlights for this new phone could be found here. The price gap is beginning to close and that's good for everyone, including iPhone fans. As prices and specifications begin to creep up on the iPhone Pro is when Apple is likely to pull the trigger and enter the market.
Here's to hoping that we'll see Apple's first Foldable iPhone come to market sooner rather than later.