In the bustling city of Beijing, Li Hua returns to her hometown in Jiangsu for the Lunar New Year, only to find herself surprised during a family gatheringSeveral elder relatives, all engaged in various businesses, have taken to flaunting their new Huawei foldable phones, instantly becoming the center of attentionAs someone familiar with the mobile phone industry, Li Hua felt compelled to share her expertise but soon realized that the group wasn't interested in the phones themselvesInstead, the conversation quickly shifted to amusing anecdotes from the year’s eventsTo her further astonishment, one of her relatives took a call using a conventional iPhone, prompting Li Hua to reconsider the social implications of smartphone choices.

This was her first real encounter with the notion that foldable phones not only represent technological advancement but also serve as critical social connectors within various settings.

As it stands, the foldable smartphone market began with the launch of Royole's FlexPai, hailed as the world's first consumer-grade foldable phone, which initiated a dramatic shift in the technology landscapeReports from DSCC indicate a staggering annual growth rate of at least 40% from 2019 to 2023 in global shipments of foldable smartphonesIn stark contrast, the overall smartphone market saw an average decline of around 4% per year during the same timeframeThus, while foldable devices remain a niche market, their rapid growth suggests an undeniable potential that no manufacturer can afford to overlook.

However, as we approach 2024, it appears that this upward trajectory may be stallingPredictions from Counterpoint suggest that global shipments will reach only about 25 million units in 2024, a mere 37% increase compared to the previous year—a significant decline compared to the 52% and 73% growth seen in 2023 and 2022, respectively.

Standing on the cusp of 2025, artificial intelligence is expected to take the reins as the new driving force behind smartphone market growth, while consumer enthusiasm for foldable devices seems to wane

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Nevertheless, there is some light at the end of the tunnel; leaks indicate that a foldable iPhone may hit the market as early as autumn next year, with OPPO gearing up to unveil its next-generation foldable flagship this month.

So, can foldable smartphones reclaim their golden era? Let's delve deeper.

Slowdown in Foldable Growth: Varied Impacts Across Manufacturers

The changing tides of the foldable phone market are illuminated by hard data, painting a comprehensive picture of widespread trends.

Counterpoint Research’s latest report reveals a 1% decline in global foldable smartphone shipments for Q3 2024, coming off a six-quarter streak of year-on-year growthThis marks the first instance in market history where shipments fell in a third quarter, contrasting sharply with the preceding quarters that enjoyed an average 48.5% increase.

When examining individual manufacturers, the performance diverges significantly.

Samsung has managed to capture the leading position in the foldable smartphone market once more with the introduction of its Galaxy Z6 seriesBy achieving a market share of 56%, Samsung remains at the forefrontHowever, this represents a 14% decrease from the same quarter in 2023, when its share was a whopping 70%, and the company's shipments plummeted by 21% year-on-year.

Following Samsung, Huawei, Honor, Motorola, and Xiaomi ranked second to fifth respectivelyNotably, Xiaomi saw a remarkable 185% increase in shipments, while Motorola and Honor exhibited gains of 164% and 121%. Huawei, despite being the leading domestic brand in China, only experienced a relatively modest 23% year-on-year increase.

Examining the domestic market, one must acknowledge that China stands as the largest and most pivotal territory for foldable smartphonesIn fact, Counterpoint previously projected that in 2024, the Chinese market would capture over 50% of global foldable smartphone shipments.

Data from IDC shows that for Q3 2024, China’s shipments reached 2.23 million units, still reflecting a 13.6% year-on-year increase but indicating a marked slowdown compared to the previous eight quarters

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By Q4, the situation worsened, with shipments dropping to 2.5 million units—a first in terms of year-on-year declines after nine quarters of consistent growth.

Looking at the complete 2024 picture for China, shipments totaled about 9.17 million units, an increase of 30.8%. While this appears commendable at face value, it pales in comparison to the triple-digit growth seen in preceding years.

As for specific manufacturers, Huawei held close to a 50% market share in 2024, followed by Honor at 20.6%, and vivo, Xiaomi, and OPPO taking the third, fourth, and fifth spots respectively.

Among notable new releases, Huawei rolled out the vertically folding Pocket 2, the horizontally folding Mate X6, and the innovative tri-fold Mate XTHonor introduced several new devices, including the Magic V3 and V FlipXiaomi presented its MIX Fold 4 and MIX Flip, while vivo released the X Fold 3. Interestingly, OPPO did not roll out any new foldable products this year.

In conclusion, both the global and domestic foldable smartphone markets are experiencing growth decelerationHowever, the extent of this slowdown varies, with the global market facing negative growth while the domestic sector remains slightly buoyantFurthermore, the performances of international and domestic brands differ markedly, evidenced by Samsung's evident decline juxtaposed with the resilience of local manufacturers.

Looking forward, many analysts hold a pessimistic view on the market’s trajectoryCanalys predicts that foldable smartphone shipments will continue to decline by 4% in 2025, with projections indicating a stagnation in demand for around 22 million unitsIDC asserts that foldable devices have run out of significant innovation opportunities and may not attract a broader consumer segment, forecasting that many vendors will adopt a more cautious approach moving forward.

Why has the growth of foldable phones hit a plateau? And how long is this trend expected to continue?

Before delving into these questions, it's crucial to define what exactly constitutes a foldable phone

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These devices employ hinges and flexible screens to create smartphones capable of folding and unfolding, thereby enhancing display area by utilizing multiple screen configurations.

Foldable phones are generally categorized into horizontal and vertical designs, often referred to in the industry as "big" and "small" foldsHorizontal models can be subdivided into inward and outward folds, offering larger displays and enriched viewing experiencesMeanwhile, vertical designs are characterized by their lightweight and compact nature, appealing to consumers seeking stylish, slim gadgets.

Additionally, foldable phones have also introduced more complex configurations, such as Huawei's Mate XT—an industry-first tri-fold device that combines inward and outward folds in a “Z-shape.”

Despite the rapid growth experienced by the foldable phone market since 2019, their penetration within the broader smartphone landscape remains worryingly lowIDC reports that as of Q3 2024, China’s foldable smartphone penetration rate sits at just 3.2%, while global figures are even more dismal, with reports indicating a mere 1% penetration in 2023.

Several factors contribute to these tepid figures.

Firstly, the cost is a major barrierFoldable smartphones usually come with a price tag that can be intimidatingFor instance, Xiaomi's MIX Alpha 5G and Huawei’s Mate XT both had launch prices of around 19,999 Yuan, often fetching even higher prices on the second-hand marketThis price surge can be attributed to the high costs associated with their components, such as advanced hinges and flexible OLED displays, which can add over 60% to the base price of comparable traditional smartphones.

Li Nan, former Vice President of Meizu, estimated that while the parts cost for standard 5G smartphones is about 3,000 Yuan, upgrading a device to include a foldable display would add roughly 1,400 YuanWhen factoring in overall production costs, a typical foldable phone may carry component costs exceeding 5,000 Yuan, with additional development and tooling expenses pushing the total to 15,000 Yuan.

Secondly, user experience remains a challenge

A report from iResearch in September 2024 revealed key consumer concerns regarding foldable smartphones, emphasizing issues related to software ecosystems, reliability, design, and hardware specificationsChief among these grievances is the inadequacy of software adaptations for different applications.

Many existing foldable smartphones maintain a 4:3 display aspect ratio when unfolded, aligning closely with tablet designsAs a result, apps like Douyin and Xiaohongshu have adapted well to this formatHowever, more complex tri-fold devices boasting high aspect ratios like 28:9 face significant challenges ensuring seamless application support, as consumer expectations extend beyond mere scaling to explore functionalities that traditional smartphones cannot offer.

Beyond these concerns, despite technological advancements, foldable displays continue to grapple with issues such as durability, battery life, and weightThis makes traditional smartphones more appealing to many usersAdditionally, the high repair costs associated with foldables further diminish consumer confidence in adopting this technology.

Lastly, the lack of groundbreaking innovation has resulted in a stagnation of interestThe novelty and cutting-edge feel that initially attracted consumers to foldable devices have dissipated, as many traditional smartphones now incorporate more rapid innovations in imaging, AI, and battery lifeEssentially, foldable phones have become an extension of screen morphology without introducing sufficient groundbreaking innovations, leading to a sense of aesthetic fatigue among consumers.

A survey from iResearch conducted in early 2024 indicated that 96% of consumers are more interested in software enhancements, desiring smarter operational capabilitiesConversely, only 64% expressed interest in future hardware breakthroughs for smaller, larger-screened devices with diverse folding configurationsClearly, for most users, improvements in imaging, AI, and battery efficiency are prioritized significantly over new form factors.

Notably, broader contextual factors are also influencing this decline in growth momentum.

According to Canalys, the global smartphone market achieved uninterrupted year-on-year growth for four consecutive quarters leading into Q3 2024, with shipments projected to reach 1.22 billion units—an increase of 6%. The average selling price (ASP) for smartphones also hit a record high of $356.

Analysts at Canalys have noted an increasing tendency among consumers to gravitate toward high-end versions of flagship lines

For example, the iPhone 16 Pro and Pro Max have seen an 11% year-on-year increase in shipments compared to their predecessors.

This positional overlap regarding target demographics may also detract from foldable phones' appealAs the smartphone market rebounds, high-end users with potential interest in foldables may lean towards more practical and intuitive flagship models instead.

As market growth slows, brands are adopting a more conservative approachThis shift involves not only prioritizing traditional flagship models and reallocating resources but also a renewed focus on AI development over foldable technology.

For instance, OPPO has not released any new foldable products throughout 2024, and reports suggest that vivo may halt plans for its new models slated for 2025. Recent news also reveals that two manufacturers have recently paused the development of tri-fold products, with industry insiders speculating that one may be Honor.

As IDC’s Anthony Scarsella has pointed out, many companies are trading off their commitments to foldables for the sake of prioritizing the development of next-gen AI capabilities.

Despite these challenges, it’s unlikely that manufacturers will fully abandon foldable devices; rather, their focus may shift from mass production towards leveraging these innovations to showcase R&D capabilities and enhance industry clout.

Unconfirmed estimates suggest that approximately ten new foldable phones are set to launch in 2025. The horizontal foldable market will welcome OPPO’s Find N4/N5, Honor’s Magic V4, vivo’s X Fold 4, Huawei’s Mate X7, Samsung’s Galaxy Z Fold 7, and Xiaomi’s MIX Fold 5. Vertical foldable models will include Huawei’s Pocket 3, Honor’s Magic V Flip 2, Motorola’s Moto Razr 60, and Xiaomi’s MIX Flip 2. Notably, the OPPO Find N5, touted as “the world’s thinnest foldable flagship,” is confirmed for a February 20 debut.

Moreover, Transsion and Samsung are also venturing into tri-fold product development, with anticipated releases in 2025 for Transsion’s Phantom Ultimate 2 and Samsung’s Galaxy G Fold.

On another note, an exciting new player may enter the foldable market soon

Sensing pressure from competitors like Samsung and Huawei, Apple has reportedly accelerated plans for its maiden foldable smartphone, with expectations for a launch in fall 2026. Early leaks hint at a horizontally folding design, diverging from earlier speculations of a compact vertical model.

Will Apple’s entry infuse the foldable smartphone market with renewed energy? Historically, Apple’s involvement has often fueled industry maturation across segmentsGiven this, consumer and investor confidence may receive a significant boost from Apple’s foray into foldables.

Further, the software integration challenges that foldable phones face might find a remedy through Apple's robust developer ecosystem, possibly leading to enhanced app compatibility and user experiencesAdditionally, Apple's commanding presence in the supply chain could lower the costs of vital components such as flexible displays and hinges.

Nevertheless, the fundamental challenge surrounding foldable smartphones remains their lack of essential consumer needsCoupled with Apple's consistent caution in smartphone iterations, skepticism may ensue regarding whether any potential Apple foldable device will deliver anything more than a lukewarm market reception, similar to the launch of Vision Pro.

The dizzying growth seen over the past few years may have led many, including consumers, industry observers, and manufacturers, to wrongly believe that foldable smartphones were the next wave that would dethrone traditional slabsIn reality, various industry metrics reveal that the foldable phone market still caters to a niche crowd, with broader acceptance hinging on factors such as price accessibility, technological reliability, and consumer awareness.

However, it can be assured that foldable smartphones are not going away anytime soon, even if monumental breakthroughs remain elusive in the short termCurrently, the foldable devices section led by Samsung and Huawei is likely to remain unchanged, and it may take time for the perception of foldable smartphones to transition from a luxury to an accessible choice for the everyday consumer.

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