Financial and Technology News

Foldable phones to remain luxuries until 2021: report

ECOSYSTEM CONCERNS:Foldable phones are likely only to ‘fall into place’ in terms of production and technology when 5G networks find widespread use, analysts said.
Smartphone makers are looking to foldable technology to reinvigorate demand for high-end smartphones and their value chains as the market becomes saturated, but the devices are in the early stages of development, with many challenges ahead, WitsView said in a report on Thursday last week.
“Foldable phones are still in the stages of market-response observation and product-design adjustment,” said WitsView, a research division of Taiwan-based market information advisory firm TrendForce Corp.
The penetration rate of foldable phones is expected to reach only 0.1 percent of the entire smartphone market this year, the researchers said.
Samsung Electronics Co late last month unveiled the Galaxy Fold smartphone at an event in San Francisco, while Huawei Technologies Co introduced its foldable Mate X at the Mobile World Congress in Barcelona, Spain, earlier this month.
More phone vendors, including Xiaomi Corp, Oppo Mobile Telecommunications Corp and LG Electronics Co, are to follow with their own foldable models, but foldable phones are not expected to become mainstream this year and shipments could be lower than 2 million units, due partly to high price tags, research firm Canalys said last month.
“Samsung and Huawei will account for the majority of foldable smartphones shipped in 2019, but high shipment numbers are not the priority,” Nicole Peng, Shanghai-based senior director with Canalys, said in a note on Feb. 25. “The goal is to capture consumer awareness and each vendor wants to prove it can achieve the greatest technological advances with its new industrial designs.”
Global smartphone shipments last year fell 4.1 percent to 1.4 billion units, from 1.47 billion units in 2017, declining for the third consecutive year, International Data Corp tallies showed.
WitsView said that more panel providers would need to join the game and panel costs must improve significantly for penetration rates of foldable phones to surpass 1 percent in 2021 and accelerate to more than 3.4 percent in 2022.
Samsung and Huawei have different — inward and outward — screen folding designs for their phones, which have different advantages, WitsView research director Boyce Fan said.
However, their new phones are still far from ideal in terms of technologies and consumer preferences, he added.
There are also not many suppliers that can produce a steady flow of foldable panels, as they are limited by their technological capabilities and yield rates, Fan said, adding that this is the “bigger bottleneck” in the early stages of foldable-phone development.
One reason consumers might not to buy foldable phones is the limited added value they would provide in terms of software and user interface optimization without 5G networks, WitsView said.
“The high transmission speeds and low latency that 5G boasts and the size-adjustability of foldable phones may furthermore boost user experience with these devices,” it said.
“It is predicted that as 5G gradually finds widespread use starting from 2021, foldable phones will fall into place production capacity and technology-wise to ride the revolutionary wave and begin their ascent in market penetration rates,” it added.
Even though foldable phones present the next evolution in mobile communications after the original iPhone in 2007, analysts said they would likely remain luxury and niche devices until 2021 or 2022.