A new foldable smartphone report goes into hyper-mode to pump up Chinese OEMs challenging the iPhone in the Premium space
While there has been some rumbling in media reports that Apple's iPhone is losing ground in China, Apple's CEO Tim Cook stated during Apple's Financial Conference Call that iPhone revenue came in ahead of their expectations. In fact, it set a September quarter record in Mainland China.
During China's 2023 "11.11 Festival," the iPhone was down 4% over last year where they captured 68% of the smartphone profits during the 2022 "11.11 Festival."
While the hype of late has been around the resurrection of the Huawei brand, the fact remains that the iPhone remained the number one smartphone during this holiday. Counterpoint bizarrely presented Huawei's growth curve way beyond its actual volume bar to make it look like they were closer to Apple than reality. Apple was number one and Huawei came in fourth spot.
The hype from Chinese smartphone OEMs and Counterpoint Research continues to push foldable smartphones because Apple doesn't offer one yet. The Counterpoint chart below hypes it up by claiming that 64% of "Premium Smartphone" users (a market that Apple's iPhone leads currently leads in) are reportedly "willing to purchase a foldable smartphone for their next purchase," with 89% showing preference for a "Book-Style" foldable over a clamshell design.
(Click on Charts to greatly Enlarge)
And yet TrendForce posted a report on September 13 (2023) revealing that foldable smartphone market penetration for 2023 is a sad 1.6% market share. TrendForce's forecast puts foldable smartphones at 5% by 2027 – four year away.
More specifically, the report states: "TrendForce’s latest insights reveal that by 2023, shipments of foldable smartphones could skyrocket to an impressive 18.3 million units, marking a 43% YoY surge. However, this only captures a slim 1.6% of the year’s total smartphone market. Fast forward to 2024, and we’re looking at another leap—a 38% growth, translating to a hefty 25.2 million units and nudging the market share up to 2.2% Looking at the medium to long term, TrendForce believes the expansion of the foldable smartphone market is inevitable. By 2027, shipments could soar to a whopping 70 million units, seizing around 5% of the global smartphone market."
The Counterpoint report is wildly optimistic while the TrendForce report is definitely pessimistic. In the end, it will all come down to price and extended warranties to give consumers the confidence that the premium foldable will last at least 3 years.
With pricing coming down steadily for foldables such as with Xiaomi's Fold 3 with 500GB storage selling at US$1,530. An iPhone 15 Pro with 512GB storage is US$1,300. In the next year or so, foldable smartphone pricing may match iPhone Pro pricing and that's when there could be a disruption in the premium space, at least in China where most major OEMs are offering foldables.
Will that challenge motivate Apple to jump into the foldable smartphone space? Only time will tell. To date, a continuation patent published in March 2021 clear indicated in its patent-claims that Apple is considering a foldable hybrid device in the form of an iPad-notebook.
As for a foldable iPhone, in May 2021, Apple analyst Ming-Chi Kuo predicted Apple's first foldable would arrive in 2023 and of course that never happened.
Chinese OEM's are attacking Apple with foldable smartphones on one hand, and on the other, an OEM like REDMAGIC is introducing a clean smartphone design where the backside cameras are flat with the back panel instead of bulging out on the iPhone in an ugly block, and the frontside camera(s) is under the display, something where Apple is still in the patent phase.
For now, beyond the negativity of some online reports, Apple's iPhone remains the number one premium phone that is also a global leader in profits.
Yet its clear that Chinese OEMs are pushing really hard to make foldables the hip new form factor to make Apple's iPhone look behind the times. Once pricing can challenge the iPhone Pro with a single display, the tide could turn in the Chinese market quite rapidly, as the visual experience is vastly superior to a single display.
Apple has a wide range of patents regarding a foldable iPhone and when they feel the time is right or that the iPhone is being challenged to higher degree than anticipated, they'll enter the market to secure their premium brand. It's just a matter of time.
Though for now, with foldables only holding 1.6% market share in 2023, the current hype from Counterpoint and others is still a little over the top and not much of a pressure point for Apple.
Hi Maryam, thanks for your feedback.
I answered those questions in the report. At 1.6% of the 2023 market, foldables are not a threat to Apple's current iPhones.
Apple has patents regarding foldables that will allow them to enter the market when the Chinese market hilts 10+% market share in the premium space. Apple won't let the premium space lose major share.
For now, why hurry? There's still issues with dust causing mayhem with the hindges on foldables; displays are still having issues. The technology behind foldables is improving and the supply chain is working hard on durability issues and price. Repairing a foldable is, from what I've read, is still a nightmare.
I will likely buy a foldable in 2-3 years and I hope that Apple will offer one. As I'm getting older, a larger display with larger type, graphics and video will be welcomed.
I was actually surprised how much I liked the new Samsung Z Fold (not counting the price, of course). My Patently Apple reports and graphics were stunning. So I'm hyped that Apple could enter this market, but like anything Apple patents, you never know when the executive team will pull the trigger.
Cheers
Jack
Posted by: Jack Purcher | December 01, 2023 at 03:42 PM
In light of Apple's recent success in Mainland China and the ongoing push for foldable smartphones by Chinese OEMs, do you think Apple will be compelled to enter the foldable smartphone market soon? The blog discusses the contrasting views presented by Counterpoint's optimism and TrendForce's pessimism regarding the future of foldable smartphones. Considering the potential disruption in the premium space and the growing popularity of foldables in China, how do you envision Apple responding to this evolving market landscape? Share your thoughts on whether Apple's current dominance will be challenged and if the rise of foldables poses a significant threat to the iPhone's position in the Chinese market.
Posted by: Maryam | December 01, 2023 at 02:27 PM