According to a news report from IJIWEI, as the supply chain reveals, three major Chinese smartphone manufacturers, Huawei, Honor, and Transsion, are estimating an active shipment goal of 70-80 million units in 2024. This estimate accounts for approximately 5% in the global smartphone market. 

On the other hands, memory manufacturers are expected to continue pushing for price increases in 2024, as demand from smartphone customers becomes more proactive in the fourth quarter.

Reportedly, the supply chain estimates that due to U.S. restrictions, Huawei’s smartphone shipments are confined to the domestic Chinese market. It is projected that new device shipments for 2024 could see growth in the range of 20-30 million units. 

Honor, with a potential 300% increase in overseas smartphone shipments in the first three quarters of 2023, coupled with the success of the Magic V2 foldable smartphone, aims to continue the momentum with a growth projection of 20 million units in 2024.

Transsion estimates a growth of 30 million units in smartphone shipments in 2024, making it the only brand currently challenging double-digit growth.

Previously, analyst Ming-Chi Kuo from Tianfeng International Securities indicated in a report that Huawei is expected to launch a new flagship series, the P70, in the first half of 2024. Benefiting from upgraded camera specifications and the adoption of the in-house designed Kirin chip, the shipment volume of the models under Huawei’s P70 series is expected to see significant growth in 2024 compared to the 4–5 million units of the models under the P60 series in 2023.

If the current robust demand for replenishing smartphone inventory continues into the first half of 2024, the shipment volume of the P70 series is expected to show strong year-on-year growth of about 230%, reaching 13-15 million units for 2024. Even if the demand for inventory replenishment slows down in the first half of 2024, the shipment volume of the P70 series is still expected to experience significant year-on-year growth of 150%, reaching 10-12 million units for 2024.

(Photo credit: Huawei)

In the pursuit of a larger screen-to-body ratio, smartphones adopting a “bezel-less” design have become a trend. According to a report from the Korean media outlet “The Elec,” rumors in the market suggest that Apple’s iPhone 17 Pro, expected to be released in 2025, will achieve a “100% bezel-less” look, with supplier LG Innotek reportedly developing an under-display camera. This innovation could potentially become a major selling point for the new iPhone series.

LG Innotek, a major South Korean smartphone camera module manufacturer, is actively working on developing an Under-Panel Camera (UPC) in response to the specific requirements of its important customer, Apple.

The concept involves completely hiding the camera components beneath the screen, eliminating the need for a camera notch. This approach aims to offer a seamless, all-screen experience, and it is anticipated that iPhones featuring under-display cameras could be introduced within the next few years.

However, the report further indicated from its sources that, currently, Apple is more likely to adopt specifications for under-display Face ID rather than UPC.

The reason behind this lies in the fact that under-display cameras come with certain drawbacks. Since the camera is under the display panel, the light transmission of the cover glass can affect the entry of light into the image sensor. Poor resolution and the inability to support high-speed continuous shooting are common fatal flaws associated with under-display cameras.

Nevertheless, according to “The Elec”, in an attempt to overcome these drawbacks, LG Innotek is working on incorporating a free-curve prism under the display for UPC. This hardware enhancement aims to improve the light transmission of the camera under the screen, addressing the issues of low transparency and poor imaging quality.

However, an industry source has pointed out that it is currently uncertain when Apple will actually use the under-display cameras produced by LG Innotek. Reportedly, according to insiders, Apple is not entirely satisfied with the samples provided by LG Innotek.

As early as 2021, Apple’s competitor Samsung had already introduced the Z Fold 3 with an under-display camera design, but the image quality of the camera was significantly inferior to that of traditional punch-hole cameras.

(Photo credit: LG Innotek)

According to TechNews’ report, after a prolonged period of price suppression in the mobile panel market, there has been an upswing in demand since the end of the second quarter, as customer inventories have reached a turning point.

The report further quoted industry sources, stating that the increased demand is notably driven by Huawei’s new models, and other customers initiating stockpiling for new models. This gradual increase in demand is raising AMOLED panel utilization rates, subsequently leading to a price uptick, which is also influencing LTPS LCD panel prices.

Previously reported by IJIWEI, the robust demand for Huawei’s Mate 60 series smartphones is expected to contribute to a total annual smartphone shipment of 40 to 50 million units. This surpasses the previous year’s shipments of 30 million units by 30 to 70%.

Industry insiders cited by South Korean media indicate that Huawei’s shipping target for the next year is 100 million units, surpassing market research company predictions by over 40%, which estimated around 70 million units.

The demand for Huawei’s new smartphone models is on the rise, especially as its high-end products extensively adopt LTPO backplane technology, occupying a portion of panel manufacturers’ capacity. Additionally, other customers initiating preparations for new models have contributed to the surge in demand, bringing China’s AMOLED panel capacity back to 80-90%.

Looking ahead to next year, the demand for AMOLED panels will still need to be monitored, particularly around the Lunar New Year. If demand continues to grow steadily, it will likely support panel prices.

As for the crucial component, OLED DDI (Display Driver IC), the process is gradually shifting from 40nm to 28nm. Currently, only UMC (United Microelectronics Corporation) globally can mass-produce the 28nm HV (High Voltage) process required for OLED DDI, while SMIC (Semiconductor Manufacturing International Corporation) employs the 40nm HV process.

With TSMC (Taiwan Semiconductor Manufacturing Company) set to join the 28nm HV process in 2025, there is no imminent shortage of supply. Therefore, the price increase in AMOLED panels may have limited impact on OLED DDI prices, and the fourth quarter and the first quarter of next year are likely to maintain a stable trend.

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• [News] Industry Insiders Report Huawei’s Target of Shipping 100 Million Smartphones Next Year

(Photo credit: Huawei)

As the global semiconductor supply chain based on specialization, the design and development of Application Processors (AP) or System on Chip (SoC) for smartphones primarily fall under the responsibility of IC design houses. In the wake of Apple’s notable success in pioneering in-house chips, other smartphone companies are now emulating this trend.

Developing in-house chips poses a challenge for smartphone brands, involving not only significant initial investments but also the navigation of various modules and architectures on the smartphone’s SoCs, including ISP and Modem. Balancing performance and power consumption optimally in specific application scenarios tests the R&D skills of designers, presenting a particularly challenging task for brands lacking relevant technological expertise. However, fueled by the ambition to “product differentiation” and “have a say in the market,” smartphone brands remain enthusiastic about venturing into in-house chips.

Smartphone Brands and SoC Dilemma

In current specialization, smartphone brands typically purchase SoC chips from IC design companies like Qualcomm or MediaTek. While they can fine-tune chip performance to suit the brand’s needs after purchase, the room for modification is quite limited.

Currently, smartphone product development is reaching maturity, and the market lacks innovation. For consumers, in the intensely competitive landscape, smartphones equipped with similar-level SoCs from Qualcomm may only differ in terms of “pricing” as a determining factor for purchase. If the market shifts into a price competition, it becomes unprofitable for smartphone brands.

Moreover, without the ability to develop in-house SoC, smartphone brands become dependent on IC design companies. If IC design companies alter their fee structures or take measures such as raising prices or adding licensing fees, brands have little choice but to comply, significantly impacting their profits.

As the central component of smartphones, if brands can design everything from scratch, it enables them to create product differentiation and gain a competitive edge. Although the initial investment is substantial, in the long run, it allows smartphone brands to have a say in the market.

Apple’s in-house SoC chip has become a significant standard for other smartphone brands in shaping their strategies. Examining Apple’s development trends, the success of the iPhone is largely attributed to Apple’s creation of powerful and efficient SoC chips.

Apple’s decision not to rely on IC design companies but to design chips in-house allowed iPhone to surpass other competing smartphone products. The key lies in Apple’s ability to plan for hardware and software from the ground up through its self-designed SoC architecture, achieving a high level of product differentiation. In addition to creating the most suitable SoC for the iPhone, it also solidifies a unique competitive advantage for Apple.

The Costly Pursuit on SoC          

However, venturing into in-house chips poses formidable challenges for smartphone brands. The primary hurdle lies in the necessity for a substantial financial investment. According to statistics from The New York Times, Apple invested about US$10 billion in developing the A4 chip, while Apple’s revenue at that time was approximately US$65 billion. At that time, the smartphone market was not saturated at that time and was still in the development stage, providing ample room for Apple’s growth.

Focus on the data, from 2010 to 2011, Apple’s revenue generated from selling iPhones grew from about US$25.2 billion to approximately US$45.9 billion, with a growth rate of about 82%. Apple’s revenue scale surpassed US$100 billion in 2012. With a huge and sufficient revenue scale support and the market still having growth potential, although self-developing chips require a large amount of investment, it is indeed feasible for Apple, whose iPhone business is thriving.

In the current mature and competitive smartphone market, creating product differentiation is the only way to break through. As most Chinese smartphone brands lack the technology to develop SoC, it becomes trending to adopt new strategy of developing in-house chips. Apart from self-developing SoC, some brands also choose to enter from the “specific function chip” on the smartphone.

Next Challenges in Plateauing Market

However, compared to the smartphone market situation when Apple initially turned to in-house SoC, current market has entered a plateau phase from the previous golden growth period. Brands find it difficult to generate sufficient revenue scale to support the high cost of in-house chips in the saturated and competitive market.

Moreover, with the continuous advancement of semiconductor process technology, the current cost to enter is much higher comparing to the past. Even with funds. Achieving in-house SoC involves a significant technical threshold, and it is challenging to bypass patents, especially when competitors have accumulated decades of experience.

Therefore, while the strategy of brands choosing to self-develop chips is likely to impact IC design companies like Qualcomm and MediaTek, its effects are expected to be limited. The reason is that for IC design companies like MediaTek and Qualcomm, they already occupy a place in the market with exclusive key technologies and accumulated intellectual property rights (IP), making it challenging for smartphone brands’ in-house chips to completely replace MediaTek and Qualcomm products.
(Image: Apple)

According to MoneyDJ’s report, Samsung Electronics, the South Korean smartphone giant, unveiled its latest foldable phones, the Galaxy Z Fold5 and Galaxy Z Flip5, in August. With a year until the next generation hits the market, speculation is arising that Samsung plans to incorporate foldable features into mid-range models. This move aims to lower the entry barrier, attract a broader customer base, and strengthen Samsung’s leading position in the foldable phone market.

TrendForce recently reported that Android smartphone brands are actively entering the foldable phone market, aiming to break through the plateau in smartphone market growth with the unique design of foldable phones. However, the widespread adoption of foldable phones faces a significant obstacle in their high pricing.

According to supply chain sources, Samsung is set to launch a mid-range foldable phone in 2024, targeting a relatively budget-friendly price range of $400 to $500 USD.

In August, Samsung launched its latest generation of foldable phones, the Galaxy Z Fold5 and Galaxy Z Flip5, maintaining a premium pricing strategy. The suggested retail prices are $1,799 USD for the Galaxy Z Fold5 and $999 USD for the Galaxy Z Flip5.

The market is eagerly anticipating Samsung’s introduction of a mid-range foldable phone. However, as of now, this remains in the speculative phase, and there’s no information available regarding its design, specifications, or other details.

Previous market rumors suggested that Samsung’s Z series of foldable phones might follow the flagship S series by introducing a “Lite Flagship” FE version. This version is expected to feature hardware downgrades to offer a more budget-friendly price, aiming to attract consumers.

According to a TrendForce’s forecast, as foldable phones gain increased acceptance in the consumer market, the global shipment volume of foldable smartphones is estimated to reach 18.3 million units in 2023. This represents a substantial 43% growth compared to 2022, although it accounts for only 1.6% of the total smartphone market sales. Looking ahead to 2024, the shipment volume is expected to grow by another 38%, reaching 25.2 million units, and the market share is projected to increase to 2.2%.

Read more

• [News] Can Foldable Phones Become Lifeline for the Declining Global Smartphone Market?
• After the iPhone 15 Series Debut, Will a Foldable Phone Be Apple’s Next Step?

(Photo credit: Samsung)