The global smartphone market has seen a continuous decline for nine consecutive quarters, with only the foldable phone category remaining resilient and maintaining growth. Android smartphone manufacturers seem to view this category as a lifeline, having released a total of 13 new foldable phones in the past three months, setting a record for the number of new foldable phones introduced in half a year.

The intensified release of foldable phone models not only reflects the sense of urgency among smartphone manufacturers but also signifies a shift towards foldable technology in the mobile industry.

Currently, the foldable phone market is not as well-established as the traditional flat-screen market, presenting opportunities and variables. All Android manufacturers aim to leverage foldable phones to enhance their market positioning, achieve high-end differentiation, and engage in distinctive competition with Apple.

In fact, during the third quarter, there were subtle changes in the landscape of the foldable phone market in China according to IJIWEI’s report. Huawei, which once dominated the foldable phone market, has seen its market share decline. OPPO and Honor have managed to surpass Huawei in terms of sales volume in the flip-fold and single-product categories.

Next year, Huawei and Samsung plan to introduce more competitively priced foldable phones, and other Android manufacturers are expected to follow suit, driving accelerated expansion in the foldable phone market.

13 New Foldable Phones Launched in 3 Months

In the latter half of this year, smartphone manufacturers including Honor, OPPO, Xiaomi, Samsung, Huawei and Transsion, have been on a roll, releasing a remarkable 13 new foldable phones within just three months. This surge in foldable phone launches has almost doubled the number of foldable devices introduced in the first half of the year.

Each smartphone manufacturer has focused on different aspects of foldable phones. Honor has been particularly aggressive in the foldable phone market, introducing three new models in just four months, constantly pushing the boundaries of thinness. In July, Honor managed to reduce the thickness of foldable phones to the millimeter era with a body thickness of 9.9mm.

In September, the Honor V Purse, an outward folding phone, had a body thickness of 8.6mm in its folded state and weighed only 214g, once again setting a new record for slim foldable phones in the market. In October, the Honor Magic Vs2 weighed 229g, refreshing the record for slim large-sized inward folding phones.

On the other hand, OPPO and Xiaomi have emphasized the imaging performance of their foldable phones. In addition, Samsung, Huawei, Transsion, OnePlus, and other manufacturers have each introduced innovative models like the Galaxy Z Flip 5/Fold 5, Samsung W24/W24 Flip, OnePlus Open, Huawei Mate X5, and PHANTOM V Flip 5G, incorporating cutting-edge technology into foldable phones and significantly enhancing the foldable phone experience. This surge in foldable phone innovation has become one of the standout features in this year’s smartphone market.

Reasons for the Proliferation of Foldable Phones

Recent intense launches of new foldable phones by smartphone manufacturers reflect their strong sense of urgency in the Android market.

Global smartphone markets have been persistently sluggish, declining for nine consecutive quarters due to factors like inflation, market saturation, and longer upgrade cycles. Traditional flat smartphones are no longer able to drive sustained market growth, and the smartphone market is in need of new growth engines.

Foldable phones, with their differentiated form and innovative experiences, have the potential to stimulate consumer upgrades, and smartphone manufacturers have high hopes for them, leading to the frequent release of new foldable phone models.

Currently, foldable phones are considered high-end products, and the intense launch of new foldable phone models by Android smartphone manufacturers is aimed at achieving brand premiumization and establishing differentiation from Apple.

In an effort to break through the high-end market stronghold that Apple has established, Android smartphone manufacturers, led by Samsung, have not only upgraded their high-end flat smartphones but have also been actively promoting foldable phone innovations, different from the iPhone 15 series. They aim to stimulate consumer upgrades and attract more high-end users who value large-screen experiences.

Price Key to Boosting Foldable Smartphone Penetration

In recent months, Android smartphone manufacturers have been consistently releasing new foldable phone models, driving up foldable phone sales and contributing to increased market penetration in the high-end smartphone segment during the latter half of the year.

Supply chain sources have also revealed that Samsung is planning to bring foldable phones to the mid-range market next year, further reducing price barriers and making foldable phones more accessible to a broader range of consumers.

This year, the lowest price for foldable phones has already dropped to 3,659 yuan (RMB), setting a new record. In the upcoming year, more manufacturers will introduce higher-value foldable phone products, thus accelerating the broader adoption of foldable phones.

TrendForce believes that the driving force behind the foldable market’s expansion is the reduced costs and the expansion strategies of Chinese brands.

Looking at TrendForce’s estimated numbers , 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, a 38% growth is anticipated, 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.

At the same time, foldable phone manufacturers are exploring new product forms and driving advancements in end-user applications. While there are certain limitations in terms of size for dual-foldable screen phones, many companies have already started working on triple-foldable screen products.

Recent reports from industry insiders suggest that Huawei’s development of a triple-foldable screen phone is progressing smoothly and may be ready for launch before March next year. It’s expected that two triple-foldable screen phones will be introduced in 2024.

On the other hand, Apple’s strategy for foldable devices differs from many Android phone manufacturers, as they are more focused on mature products and not in a hurry to release foldable phones.

According to TrendForce’s research, to date, Apple’s foray into foldables has been tepid due to Apple’s unwavering obsession with user experience.

Persistent challenges with foldable tech—think panel evenness and hinge design—might be holding them back. Still, achieving perfection with larger foldable panels is somewhat simpler than their smaller counterparts. The possibility for Apple to leapfrog right into medium-sized foldable products – like laptops or tablets – still remains.

(Photo credit: Phantom)

Non-Apple IC manufacturers are reporting positive business performance this quarter. Chinese brands are experiencing a revival driven by the release of new Huawei smartphones, and a resolution in inventory clearance in emerging markets. This has led to an increase in orders. Additionally, Samsung’s success in foldable phones is contributing to the upsurge. This overall trend is benefiting companies like MediaTek and Novatek in the smartphone-related IC manufacturing sector.

As reported by CTEE, China holds about 25% of the global smartphone market, with industry analysts predicting sales of 260 million units in China for 2023. Huawei’s re-entry into the smartphone market will significantly impact the smartphone SoC market share in 2024. This development will challenge Apple’s market share in China, and Huawei’s upcoming Nova mid-range smartphones will also affect brands like Honor, OPPO, Vivo, Xiaomi, and others, as they vie for market share.

Key drivers of the smartphone industry’s recovery

According to Economic Daily News, many Chinese smartphone brands are optimistic about the local market’s improvement following the launch of Huawei’s new smartphones. Beyond flagship models like the Mate 60, mid-range series like Nova are also showing increased activity. Leading non-Apple smartphone manufacturers are gearing up for a surge in demand and are actively stocking up on top-tier flagship chips, thus stimulating the supply chain’s demand for additional orders.

At the same time, Taiwanese manufacturers mention that Chinese smartphone brands that primarily target emerging markets have already digested their accumulated inventory and are now starting to replenish their stocks. Some smartphone-related chip manufacturers have also pointed out that Samsung and other Korean smartphone giants are enjoying good sales of foldable phones and have recently conveyed messages about increasing orders.

TrendForce notes that the current revival on demand side in the global smartphone market is primarily driven by inventory restocking. The potential for sustained orders remains uncertain due to the prevailing economic challenges.

(Image: MediaTek)

Explore more:

• [News] Oppo and Transsion Expand to Southeast Asia, with a Focus on Foldable Phones
• [News] Industry Insiders Report Huawei’s Target of Shipping 100 Million Smartphones Next Year
• [News] Xiaomi’s Second Chip Company Founded with a Capital of 3 Billion Yuan
• OLED Penetration in Smartphones to Exceed 50% in 2023

According to Bloomberg, Apple is quietly catching up with its competitors in the AI field. Observing Apple’s layout for the AI field, in addition to acquiring AI-related companies to gain relevant technology quickly, Apple is now developing its large language model (LLM).

TrendForce’s insights:

1. Apple’s Low-Profile Approach to AI: Seizing the Next Growth Opportunity

As the smartphone market matures, brands are not only focusing on hardware upgrades, particularly in camera modules, to stimulate device replacements, but they are also observing the emergence of numerous brands keen on introducing new AI functionalities in smartphones. This move is aimed at reigniting the growth potential of smartphones. Some Chinese brands have achieved notable progress in the AI field, especially in large language models.

For instance, Xiaomi introduced its large language model MiLM-6B, ranking tenth in the C-Eval list (a comprehensive evaluation benchmark for Chinese language models developed in collaboration with Tsinghua University, Shanghai Jiao Tong University, and the University of Edinburgh) and topping the list in its category in terms of parameters. Meanwhile, Vivo has launched the large model VivoLM, with its VivoLM-7B model securing the second position on the C-Eval ranking.

As for Apple, while it may appear to be in a mostly observatory role as other Silicon Valley companies like OpenAI release ChatGPT, and Google and Microsoft introduce AI versions of search engines, the reality is that since 2018, Apple has quietly acquired over 20 companies related to AI technology from the market. Apple’s approach is characterized by its extreme discretion, with only a few of these transactions publicly disclosing their final acquisition prices.

On another front, Apple has been discreetly developing its own large language model called Ajax. It commits daily expenditures of millions of dollars for training this model with the aim of making its performance even more robust compared to OpenAI’s ChatGPT 3.5 and Meta’s LLaMA.

2. Apple’s Advantage in Developing a Paid Subscription Model for Large Language Models Compared to Other Brands

Analyzing the current most common usage scenarios for smartphones among general consumers, these typically revolve around activities like taking photos, communication, and information retrieval. While there is potential to enhance user experiences with AI in some functionalities, these usage scenarios currently do not fall under the category of “essential AI features.”

However, if a killer application involving large language models were to emerge on smartphones in the future, Apple is poised to have an exclusive advantage in establishing such a service as a subscription-based model. This advantage is due to recent shifts in Apple’s revenue composition, notably the increasing contribution of “Service” revenue.

In August 2023, Apple CEO Tim Cook highlighted in Apple’s third-quarter financial report that Apple’s subscription services, which include Apple Arcade, Apple Music, iCloud, AppleCare, and others, had achieved record-breaking revenue and amassed over 1 billion paying subscribers.

In other words, compared to other smartphone brands, Apple is better positioned to monetize a large language model service through subscription due to its already substantial base of paying subscription users. Other smartphone brands may find it challenging to gain consumer favor for a paid subscription service involving large language models, as they lack a similarly extensive base of subscription users.

Read more

• [News] Apple’s Exclusive AI Order Boosts Revenue via Foxconn’s FII Vietnam Plant

In June of this year, Apple introduced the new Vision Pro headset, priced at $3,499, with plans to release it by early next year (by the end of April).

According to Bloomberg’s Mark Gurman in the Power On newsletter, Apple had been considering the development of a cheaper headset even before its June release, as the $3,499 price tag for the Vision Pro is a significant barrier to widespread adoption.

Reportedly, this more affordable follow-up version of the Vision Pro may abandon the use of an external display and Mac-grade chips to fall within the internal discussion range of $1,500 to $2,500. While not exceptionally cheap, it’s nearly half the price of $3,499.

Gurman also stated that this budget-friendly version might employ iPhone-grade chips rather than Mac-grade ones, reduce the number of cameras, and come equipped with a lower-resolution screen to cut costs.

It’s worth noting that forgoing an external display would mean Apple is eliminating a significant feature of the Vision Pro – EyeSight.

Upon first encountering the Vision Pro, individuals unfamiliar with VR technology might think the front of the device is a transparent glass, but in reality, it is an opaque display screen that also includes cameras, sensors, and chips, among other components.

Mike Rockwell, Vice President of the Vision Pro technology development team, explained that the display screen is not only curved but also lens-shaped. This means that users will see different images from various angles, in contrast to traditional 2D displays that can make the user’s eyes look unnatural, especially from a side view.

When someone approaches a user wearing the Vision Pro, the device’s field of view becomes transparent, allowing the user to see the person approaching, and the approaching person can also see the user’s eyes. When users are immersed in a spatial environment or using an app, EyeSight provides visual cues, letting others know what the user is focusing on.

In addition to developing a more affordable model, Apple is also working on a mature second-generation Vision Pro product. The new headset will have a smaller, lighter body and provide a more comfortable fit.

Explore more 

• Decoding Apple’s Display Choice: Micro OLED Triumphs over Micro LED in Vision Pro
• A Comprehensive Overview of Global Micro OLED Manufacturers

(Image: Apple)

1. Gloomy Global Economy Affects Smartwatch Sales, Predicted 2023 Shipments at 130 Million

In 2023, the trajectory of the smartwatch industry is shaped by two major forces. On one hand, it’s driven by the shift in demand from the smart wristband market, becoming a gateway for brand manufacturers to create market momentum on a global scale. However, it also grapples with the impact of the sluggish economy, which affects consumers’ disposable income, leading to a reduction in market demand.

It’s estimated that the market will grow to 130 million units by the end of 2023. Brand manufacturers’ share of shipments hasn’t seen significant changes, and they continue to introduce innovative products. Apple leads with over 30%, followed by Samsung at nearly 10%, alongside Huawei, Garmin, Fitbit and others.

2. Manufacturers Opt for More Cautious Strategies, Focusing on Minor Upgrades and Diversified Research

Given the uncertain landscape, major smartwatch manufacturers like Apple, Samsung, and Huawei are expected to embrace a more conservative development approach. While they will keep innovating and introducing new products, their design philosophy leans towards incremental upgrades.

High-end watch models will be introduced with caution, targeting well-defined niche markets. Furthermore, some brands are likely to venture into other smart wearable devices, but many of these new devices face challenges in terms of data analysis, application integration, and market maturity, which means it will take time before they become commercially viable.

3. AI Focus: Major Manufacturers Prioritize AI Integration for Accuracy and Innovation

Without making substantial changes to their existing structure, companies are proactively utilizing AI technology as the cornerstone of their development strategy. This approach yields benefits such as fine-tuning existing sensor data for more precise measurements and the creation of applications that cater to consumer needs.

As AI applications heavily rely on chip performance and battery life, companies like Apple are upgrading their chips. This move aims to elevate past auxiliary functions into mainstream operations through AI. Moreover, this technology may further integrate with their Vision Pro devices’ gesture controls, enhancing the overall user experience.