Price is still the biggest obstacle for foldable devices

Samsung will unveil a new generation of foldable devices this week – but the main barrier preventing them from being sold to consumers is their high prices.

The world’s largest mobile phone maker will also have to try to regain its leading position in the foldable phone market, which it lost for the first time in the first quarter of this year.

Seoul-based Samsung will unveil the Galaxy Z Fold6 and Flip6 at its second Unpacked 2024 event in Paris on Wednesday. The company, which does not comment on speculation, has not officially confirmed the names of the devices.

The improvements to both smartphones, according to multiple leaks and reports, include a flatter design similar to the recent Galaxy S24 series, improved cameras, and a more efficient Galaxy AI platform, which was first incorporated into S24 devices. A built-in S-Pen stylus is not expected in the Fold6.

However, despite the nominal price tag and necessary improvements in the foldable device segment, the biggest obstacle for consumers considering switching to this still niche format remains price, which is hampering the sector’s growth, analysts say.

“Despite the continued growth of foldable devices… the market is not growing as expected,” said Aaron West, senior smartphone analyst at industry data tracker Omdia National.

“High consumer cost remains a major obstacle to greater market penetration of foldable phones. Any new foldable phone releases must address both this cost and the lack of use cases to make foldable phones more appealing to consumers.”

Additionally, consumers are noticing improvements including dust and water resistance, more advanced hinges, screen durability, battery life, camera technology, software support and devices becoming lighter and thinner.

“The steady improvements… indicate that foldable devices are becoming a serious category,” said Akash Balachandran, research manager for mobile devices at International Data Corporation National.

“Foldable smartphones have traditionally been in the premium and ultra-premium categories, which limits their reach and appeal. However, as average selling prices (ASPs) decline, we can expect significant sales growth, especially in the flip form factor, where prices are already falling.”

Samsung Loses Foldable Device Crown

Foldable smartphones are still a small category in the overall smartphone market, but manufacturers are constantly trying to bring more models to market as consumer preferences change.

Their popularity is largely attributed to Samsung, which brought the category into the mainstream, starting with the original Galaxy Z Fold in 2019. The company followed this up the following year with the Galaxy Z Flip, a smaller but also more affordable phone to attract more users.

Since then, Samsung has dominated the foldable smartphone category, with its market share peaking at over 80 percent about two years ago.

However, the first quarter of 2024 saw a significant change: Huawei now has the largest share of the foldable smartphone market, with about 35% of the market, overtaking Samsung’s 23%, down sharply from 58% a year earlier, according to a May report by Counterpoint Research.

Up and down forecasts

While industry reports on the future of the foldable smartphone sector all point to continued growth, projected numbers vary.

According to data from IDC, global foldable smartphone sales are expected to reach 25 million units in 2024, up about 38% from 18.1 million last year, and are expected to rise to 45.7 million by 2028, at a compound annual growth rate of 20.3%.

Samsung also faces other big names with their own foldable smartphones, including Oppo, Motorola, Google and Honor, a former Huawei subbrand that ranked third in the three months through March, according to data from Hong Kong-based data firm Counterpoint.

Huawei’s growth, Mr West said, was largely driven by its home territory of China, which was the “most preferred” choice for consumers in the world’s second-largest economy – despite the lack of Google services.

“Outside of China, Samsung’s biggest competitors are Honor, which makes ultra-slim, book-style foldable phones, and Motorola, which makes the more affordable Razr series of clamshell-style foldable phones,” he said.

Meanwhile, a separate TrendForce report from June forecast that Samsung’s market share will account for more than half of the market and retain its leading position in 2024, with Huawei in second place with about 31 percent share.

They will form the upper echelon of this year’s race, with deliveries expected to reach 17.8 million units, the Taipei-based research firm said.

This would represent just 1.5% of the overall smartphone market, but that is expected to grow to around 5% by 2028, it added.

“It’s only a matter of time before consumers stop thinking that choosing a foldable device is a major compromise – but prices need to come down,” Balachandran said.

Updated: July 8, 2024, 7:13 AM