Clamor for Greater Innovation in Foldables a Necessary Step in Smartphone Market Transformation

By David McQueen | 4Q 2024 | IN-7582

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Released in September 2024, Huawei became the first mobile device vendor to launch a tri-fold 5G smartphone, the Mate XT Ultimate. The device offers a unique 3-screen folding mechanism, allowing it to transform from a 6.4-inch compact phone to a larger 7.9-in device, and then to a 10.2-in tablet-sized display when fully opened. Unfolded, the device is 3.6-4.8 Millimeters (mm) thick and 12.8 mm when fully folded. The innovative design allows users to manipulate the folding screens with the goal of enhancing productivity, media consumption, and multitasking.

The Mate XT Ultimate is packed with Huawei's own Kirin 9000S chipset and HarmonyOS 4.2 Operating System (OS). The device is only available in China with a possible, but limited global launch expected in 1Q 2025. Given the complexity of the design and high-end components, the Mate XT Ultimate comes with a hefty price tag at approximately US$2,500, which puts it around US$500 more than a Samsung Galaxy Z Fold6 and almost US$1,000 beyond the most expensive Apple iPhone 16 Pro Max.

It has been over 5 years since foldables first made their debut, but while shipments and their share of the smartphone market has been slow, the foldable segment has become an important part of the ecosystem offering unique user experiences. Despite this steady if unspectacular growth, the sector has been helped by a healthy roster of available devices, in both flip and fold form factors, from a variety of global brands including Samsung, HONOR, Google, Motorola, Huawei, vivo, OPPO, and TECNO. The addition of a tri-fold design brings yet another dimension to the market. It represents a significant step in innovation, potentially allowing the three displays to fold in multiple directions, thereby transforming the device into an array of differing cogent user experiences, catering to multimedia and productivity trends.

Huawei's launch of a tri-fold smartphone is a bold move and marks a significant leap forward in both design and functionality. While the company has stolen a march on its competitors with the new device, sales are expected to be tied largely to its own Chinese market, where it has retrenched since the start of the geopolitical tech wars, and this does not seem to be changing any time soon. However, tri-folds are expected to be announced by other key global brands, many of which have dipped their toes into the foldable sector. Specifically, Chinese vendor TECNO already has a concept tri-fold device in the market for review, the Phantom Ultimate 2, while Samsung is reportedly working on a tri-fold smartphone due for launch in 2025. Other leading, notably Chinese, vendors expected to launch their own tri-fold smartphones include Xiaomi, HONOR, and OPPO. Indeed, HONOR stands out as a prime candidate for entering the tri-fold market, having excelled in the foldable sector with its latest Magic V3 device, a refined evolution of its flagship that currently holds claim to being the world's lightest and thinnest foldable smartphone.

To help drive a sector on the cusp of embracing tri-fold devices, MediaTek announced that its new flagship mobile chipset Dimensity 9400 has support for tri-fold smartphones, thereby enabling the smooth scaling of content for the extended number of screens. In addition, Qualcomm announced its new Snapdragon 8 Elite flagship mobile chipset, and while there is every chance it will provide support for tri-fold devices, this has yet to be clarified. Through using such chipsets, mobile vendors will be given the options and flexibility to create more innovative designs, from the flagship standard bar to tri-fold smartphones.

However, a major stumbling block for tri-fold smartphone adoption will be the relatively higher price points due to the added complexity of design and component costs. Moreover, while such devices promise a unique user experience that is inherent in all foldable devices, such designs must still be created with the aesthetics and usability that the form factor necessitates. Also, tri-folds cannot compromise on the strengths of "traditional" flagship smartphones, such as good camera arrays, quality screens, long battery life, and comparable performance, if they are to convince the consumer they offer innovative technology with highly practical uses, or else they risk being consigned as an expensive gimmick product.

Despite the best efforts of many in the industry over the past few years to make the user experience of foldable devices more acceptable, including thinner and lighter designs, good battery life, improved durability through better hinges and crease-free displays, fold and flip form factors, and larger cover screens, they have still yet to fully convince consumers of the practicalities of foldable phones. Now with tri-folds in the mix, they still need to go through a lot of changes in the coming years in terms of innovation and hardware, as well as price, to hit critical mass. Foldable market volume is still small for the time being, running at less than 2% of total smartphone shipments globally, and adoption remains low. Indeed, lead player Samsung has seen a reduction in orders for Organic Light-Emitting Diode (OLED) foldable displays due to lower-than-expected demand for its most recent foldable smartphones. However, this may have been the result of the growing strength of competing devices grabbing market share, rather than any innate problem with its portfolio.

The launch of more foldable products and their differing form factors will create healthy competition in the smartphone market, which is important for building the category and bringing more innovation in design, functionality, and durability. While growth of foldables is still hampered by relatively higher price points as the market matures and competition in the sector improves, it should help reduce prices leading to increased demand, and a broadened consumer and geographical presence. Importantly, the sector may need a foldable product, possibly tri-fold, from Apple to be the catalyst that stimulates market growth, although this is believed to still be some way off.

Adding "tri-fold" to the choice of "flip" and "fold" foldable phones allows greater focus on different consumer segments, as each offers different utility and user experiences. In essence, the "fold" type is typically a larger device that affords the user access to a bigger screen, while "flip" phones utilize a standard sized screen that can be made more compact. The inception of tri-fold smartphones brings yet another set of experiences, potentially offering 3-in-1 benefits as their multi-positional screens' transformation can be leveraged across smartphone, phablet/tablet, and (partial) Chromebook/laptop sizes and functionality. This is all made available in a single device that folds down to a size and thinness small enough to fit in the pocket. There will, of course, be compromises when using a tri-fold device across these differing use cases and screen sizes, not forgetting the high price point. This is where consumers need to make a decision between purchasing a single expensive product, while sacrificing some elements of usability, or otherwise investing in a set of individual devices that are designed to have better utility and experience for certain tasks. Ultimately, user choice will come down to preference, productivity, and portability and, literally, whether one size can fit all.

It is too early to tell how tri-fold smartphones will be accepted by consumers or what the main motivations will be for purchase, and with Huawei's device likely to be restricted to China's market, a clearer picture is not expected to emerge. However, it is evident that the foldable market has abundant room for growth if it can move from being a niche, expensive technology to one that can aspire to mass adoption. New brand entrants and foldable innovations, such as tri-fold and possibly rollable displays sometime in the future, undoubtedly mark a major leap forward in smartphone technology, while supporting sector growth, improving build quality, and reducing price. Indeed, this clamor for more innovation in foldable displays can be viewed as the next vital step in future smartphone market transformation. However, caution must be taken to ensure the industry can adapt to this new display development, while not losing sight of the overall user experience and higher spiraling costs that are imperative if it is to continue delivering the technology with improved and more affordable options.