Foldable Phones: Korea, US, China – Apple & the Future

The global market for ‘foldable smartphones’, where the screen can be folded and unfolded like a book, has been a two-way battle between Korea and China ever since Samsung Electronics opened with the Galaxy Fold in 2019. This is because Apple, an existing smartphone powerhouse, was passive in entering the foldable phone market. While Samsung Electronics improved its technology last year with the Galaxy Z Fold 7, Flip 7, and Tri-Fold, China’s Huawei, Motorola, and Honor continued to challenge as latecomers and share market share. This market structure is expected to shift into a three-way war between Korea, the United States, and China, starting with Apple’s participation this year. The pace of product evolution is also likely to accelerate.

On the 23rd (local time), foreign media such as Bloomberg reported that Apple plans to unveil part of the iPhone 18 series in September this year and then introduce its first foldable phone, the iPhone Fold (tentative name), in December. Foreign media reported that development has reached the final stage, with the exterior design of the iPhone Fold already confirmed, based on recently leaked CAD drawings (computer-drawn product design drawings). According to this, the iPhone Fold is expected to have the ability to simultaneously run two applications (apps) left and right on a single screen of around 7.8 inches, which is slightly smaller than the existing iPad (11 to 13 inches) when unfolded. It will also be equipped with up to 1TB (terabyte) of storage space.

Smartphone market shows low growth of 1% due to economic slowdown
Apple is known to be preparing to apply special new materials to improve the wrinkles and durability of the hinge (folding part), a chronic weakness of foldable displays. Jeff Fu, an analyst at GF Securities in Hong Kong, predicted that “Apple could start producing prototypes of foldable phones starting in April.” There were also reports that discussions on the iPhone Fold have virtually concluded with Taiwan’s Foxconn, which produces iPhones on consignment basis.

It is analyzed that the rapidly changing situation is responsible for Apple, which had postponed its entry into the foldable phone market for the past several years due to reasons such as brand philosophy, hastening to ‘join the war’ this year. According to related industries, demand for smartphones continues to slow due to growing uncertainty amid the global economic downturn, such as the war between the United States, Israel, and Iran showing signs of prolongation. Market research company IDC analyzed that the global smartphone market will grow at an average annual growth rate of less than 1% until 2029. In particular, Apple was pointed out that its growth had stagnated amid criticism that it lacked innovation and fell behind in the artificial intelligence (AI) technology competition every time it released a new iPhone series. This led to market doubts about Apple’s unique premium strategy that focuses on operating profit rather than sales and market share.

Samsung Electronics introduced the Galaxy Z Tri-Fold, a three-tier foldable smartphone in December last year. [뉴시스]

Market research firm Counterpoint Research (CPR) lowered Apple’s sales growth forecast last year from 4% to 2.5%. An industry insider said, “Foldable phones still account for a low proportion of about 1.5% of total global smartphone shipments, but their innovative image could be a turning point in premium strategies.” He added, “Apple may have been stimulated by Samsung Electronics’ improved brand image with favorable reviews of new products such as the (Galaxy Z) Tri-Fold last year.” The Tri-Fold, which allows the screen to be folded twice and unfolded into three panels, was quickly sold out due to positive reviews calling it an “unprecedented form factor (device type),” raising expectations for the future market, and the regular Fold 7 model was also evaluated as having succeeded in making a groundbreaking improvement in portability.

The entry of Apple, which has a strong iPhone-based premium demand base, is expected to cause a tectonic shift in the global foldable phone market, which has been formed as a structure of ‘Korea leading and China following’. According to CPR, last year’s global foldable phone market was led by Samsung Electronics with a 40% share, followed by Huawei (30%) and Motorola (12%). However, if Apple launches the iPhone Fold this year, it is expected to take second place at once with 28%, encroaching on the market share of Samsung Electronics (31%) and Huawei (23%), overtaking Chinese companies. Market research firm Modo Intelligence predicted that the global foldable phone market, which was $31.37 billion last year, will grow at an average annual rate of 23.3% over the next five years from $38.68 billion (approximately KRW 58 trillion) this year to $110.19 billion (approximately KRW 167 trillion) in 2031 due to the addition of Apple.

CPR analyst Gerrit Schneemann said, “Apple will quickly reorganize the competitive landscape for foldable phones, recording a 46% market share in the North American market in the first year of its launch, pushing Samsung Electronics to 29%.” In the United States, in addition to Apple, there is a possibility that Google will introduce the next-generation foldable phone, Pixel Fold, in the fourth quarter of this year. China plans to fight back by shifting from a cost-effectiveness (price-performance) strategy to a premium strategy. Oppo launched the Find N6, promoted as the world’s first hinge-free foldable phone. This product reduces the hinge height deviation from the existing 0.2 mm to 0.05 mm, making wrinkles almost invisible to the naked eye.

Huawei announces new product launch in the second quarter of this year
Motorola plans to release Razr Fold, its first book-type (opens left and right like a book) foldable phone in the second quarter of this year. Huawei also decided to increase its market share by launching a new product, Pura X2, in the second quarter of this year. In response to this, Samsung Electronics aims to overcome latecomers by maximizing its technology in foldable phones, just as it competed with a ‘super gap’ strategy in the semiconductor business. Next year, along with Tri-Fold 2, we plan to release Galaxy Z Slide (tentative name), a new product that expands the screen ratio horizontally by stretching the screen when pulled. We also plan to work hard to manage profitability. It is reported that Noh Tae-moon, CEO of Samsung Electronics’ Device Experience (DX) division, declared an emergency management system and instructed internally to find ways to reduce costs down to the smallest parts.

The key for the industry is to launch new products at a reasonable price amidst the so-called ‘chip inflation’ situation in which the price of memory semiconductors used in foldable phones is rapidly rising. According to Wall Street, the iPhone Fold is expected to cost at least $2,300 (about 3.5 million won) each. Samsung Electronics’ next Galaxy Z Fold 8 is also likely to cost close to 3 million won. In this case, there is an analysis that even consumers who are highly loyal to each brand find it difficult to make a purchase. Kim Jong-ki, a senior researcher at the Korea Institute for Industrial Economics and Trade, pointed out, “In order for foldable phones to succeed in securing continued demand that overcomes the risk of price increases, companies must make follow-up efforts, such as building attractive exclusive content.”