In the realm of technological evolution, the smartphone market is witnessing a noticeable shift. Foldable phones, once a novelty, are now becoming a game-changing trend, with brands like Samsung, OPPO, Huawei, and Xiaomi competing fiercely to capture a larger slice of the market pie. This surge in popularity of foldable phones is expected to have a ripple effect, benefitting companies in the supply chain, including TSMC, which manufactures processors for these devices, and Largan Precision, which supplies camera modules.
Rising Affordability: A Catalyst for Mainstream Adoption
Despite the allure of foldable phones, their high cost has been a significant barrier to widespread adoption. Most models are priced above the $1,000 mark, with the steep cost attributed to the additional components required for the folding mechanism, such as hinges or bearings. However, as the technology matures and the cost of components decreases, the market is expected to witness the introduction of more affordable foldable phones. Research firm TrendForce asserts that the expansion of the foldable phone market is being driven by the decreasing cost of components and the increased market presence of Chinese brands. The cost of key components such as displays and hinges is reducing, which will enable the retail prices of foldable phones to stabilize below $1,000, making them more accessible to consumers.
Impact on the Mainstream Smartphone Market
The advent of affordable foldable phones is also expected to impact the mainstream smartphone market, leading to increased competition among brands such as Samsung, OPPO, Apple, and Huawei. This will require these brands to develop effective market strategies to stay competitive in the evolving landscape. In the foldable phone market, Samsung currently holds the largest market share, although its dominance has decreased due to the growing competition. Huawei is the second-largest player in the market, followed by OPPO and Xiaomi. Chinese brands have primarily focused on the domestic market, but they are likely to expand their presence overseas as competition intensifies and consumer acceptance of foldable phones increases.
Beneficiaries in the Supply Chain
The supply chain for foldable phones involves companies like TSMC, which manufactures processors, and Largan Precision, which supplies camera modules. The increasing demand for foldable phones is expected to drive significant growth in the shipment of new devices, benefiting Taiwanese suppliers in the supply chain. In addition to the growth in the foldable phone market, Huawei has been making significant strides in the smartphone industry. The company recently released the Mate 60 series, which features the Kirin 9000S processor and supports 5G and satellite communication. This development is seen as a breakthrough for Huawei in overcoming the US government’s technology export ban. However, there is uncertainty regarding Huawei’s product design and future development due to potential adjustments in US export restrictions. Overall, the foldable phone market is expanding rapidly, driven by the decreasing cost of components and the entry of Chinese brands. This growth presents opportunities for companies in the supply chain, particularly Taiwanese suppliers. The introduction of more affordable foldable phones is expected to increase market penetration and intensify competition among smartphone brands.
