What you need to know
- Apple might launch a foldable phone in 2023.
- Samsung still holds the market share for foldable devices, but this could fall.
- Samsung has two years to make an even better foldable phone.
Samsung is going to have a difficult time maintaining a market share for its foldable phones if and when Apple releases a comparable model, experts say.
On May 3, TFI Securities analyst Ming-Chi Kuo predicted in an analyst note that the company is likely to launch a foldable iPhone. His note indicates that foldable phones are a "must-have" and that "after 5G, the foldable smartphone is the next innovative selling point of high-end models."
Neil Shah, vice-president of research at Counterpoint Research, said in an interview that for the overall market, "it will be difficult for Samsung to maintain share once Apple enters."
"Apple, if it [figures out design and production], should be able to capture a lion share of the segment because of its sheer scale even though it will be late to the party," he said.
Samsung doesn't break down how many foldable phones it's sold, but at CES 2020, Koh Dong-jin, president and CEO of Samsung's mobile division, said the company has sold 400,000 to 500,000 Galaxy Fold smartphones.
'Samsung is facing more competition'
Global shipments of foldable phones are expected to reach about 18 million by the end of 2022, but that's only 1.2% of the total addressable market in smartphones, according to a research note from Counterpoint. That note added that the number will be low as the "industry experiments with various form factors, designs, materials, and operating system variants."
"Samsung has led the segment in terms of design, marketing, and shipments, dominating last year with over 80% share of the foldables market," Jene Park, senior analyst at Counterpoint, wrote in the note. "The company also had the strongest lineup, with various models and variants including a second-gen flagship. This year, however, Samsung is facing more competition, with the release of Huawei's critically lauded Mate X2, Xiaomi's Mi Mix Fold, and announcements from Vivo, OPPO, and TCL hinting at 2021 launches."
Edward Jones' analyst Logan Purk agreed in an interview, adding that Samsung will lose that edge because of Apple's entrance.
"It's a similar case with Tesla electric vehicles. They dominate that market now, but as more entrants get into it, they will naturally lose market share because there will be more opportunities or options for consumers," he said. "I think Apple will get its share, I think Samsung will still get share, but they clearly won't dominate the market anymore."
Purk said the move to potentially release something by Apple follows a "typically Apple playbook," adding that the company rarely is first to market with a new category.
"The Apple Watch is a good example; they weren't the first to market with a wearable," he said. "I think what's happening now is we've seen all the difficulties that manufacturers have had with foldable phones… And I think this allows Apple to anticipate what those issues may be and address them early on."
Apple's entry into the foldable market will be a 'watershed moment'
Carmi Levy, a technology analyst, said in an interview that where Samsung will succeed is it now has a two-year lead time to release updates to existing foldable devices and put out a phone that could successfully outshine Apple's.
"Apple has the luxury of being able to allow other companies get battered and bruised first before it decides to enter a market. So if you're Samsung, this is a case of history repeating itself. And at the very least, Samsung now has a roadmap, a timeline to continue to improve on the offerings that it's already brought to market."
Levy said that by 2023, more companies are likely to start making foldable devices a mainstream option. He added that once Apple enters the market, consumers will start rethinking what they want in a phone.
"For the last 10 to 13 years, we've all essentially seen is the same basic phone, which is a large slab of touchscreen glass. At some point, that has to end. And it's reasonable to assume that foldable phones will be, at least part of the solution that replaces what we're currently using," he said. "Apple releasing a foldable phone will be a watershed moment."
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