Foldable smartphones have finally arrived after many years of countless leaks, rumors, and reports, but according to Trend Force analyst, Boyce Fan, the market penetration rate for this new category of mobile phones won’t exceed 0.1-percent by the end of 2019.
It will take at least a couple more years for foldable phones to make a dent in the market higher than 1-percent, and the segment’s growth is highly dependent on the number of display suppliers that will be able to deliver this new technology to device manufacturers.
The analyst predicts that it won’t be until 2022 when the market penetration rate of foldable phones will surpass 3.4-percent. As yet, the emerging technology is too new to make a huge impact on the mobile market, and OEMs are primarily focused on observing the market response and determining what further product design adjustments might be required to make foldable devices more appealing to prospective buyers.
At the moment, the two main players in the foldable phone segment seem to be Samsung and Huawei, both of which have unveiled their products last month. Samsung took the veil off the Galaxy Fold at its own Unpacked event in San Francisco, while Huawei brought its Mate X foldable device to Mobile World Congress in Barcelona. OPPO also had its own prototype model showcased at the same event.
One of the reasons why not too many other OEMs have showcased their first foldable products until now might be that aren’t that many foldable display suppliers on the market. Samsung relies on its own Display division and its foldable AMOLED panel is the result of nearly 10 years of research and development.
Meanwhile, Huawei relies on suppliers from China – with recent reports naming BOE as the main player in Huawei’s foldable smartphone plans. Nevertheless, the recent Trend Force paper reveals that Korean manufacturers are a long way ahead of its rivals from China which are presently estimated to have a foldable production capacity that would cover only 27-percent of the global market.
The situation is likely to change over the next two-to-three years as more panel manufacturers in China should increase the production capacity of their foldable display solutions. China-based suppliers are expected to catch up with rival suppliers from Korea after 2020.
Both the Samsung Galaxy Fold and Huawei Mate X are expected to launch for around $2,000 or more, pushing the mobile market’s upper price ceiling to unprecedented levels. This is partly because of lack of display suppliers and low production capacity in this emerging segment. Likewise, the high costs won’t help the market penetration rate to increase very fast, but as more suppliers will be able to provide smartphone OEMs with foldable solutions, competition will set in and launch prices for this new category of mobile devices are expected to decline.
It appears that mobile panel manufacturers are now locked in a new competition but they’re also trying to determine if increasing their production capacity is worth it. A previous report from South Korea revealed that Samsung is currently capable of manufacturing 2.4 million foldable AMOLED panels a year, but is unsure whether it should increase its production capacity.
Reportedly Samsung is already looking to secure new clients for the display technology, including giants like Apple and Google. Technically, Samsung Display would be able to increase its foldable display production capacity to around 10 million units per year, but before this happens the supplier needs to know if there is enough demand.
All in all, foldable smartphones are real, they will launch in the coming months, but they are still in the experimental stages of market development. The success or failure of the first foldable phones will likely have a huge impact on how the segment will continue to evolve over the coming years, but for now, it appears that foldable phones are not a threat for the proven “chocolate-bar” smartphone form factor popularized over the past decade.