Beijing, Hong Kong, Seoul, New Delhi, London, San Diego, Buenos Aires – July 7, 2023

Global Foldable Market YoY Growth Rate by Major Region, Q1 2023

China Foldable Market Share by OEM, Q1 2023 YoY

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The post Global Foldable Smartphone Market Continues to Expand, Underpinned by China appeared first on Counterpoint.

Apple performed well in 2021 by successfully occupying the space vacated by Huawei in the Chinese smartphone market’s premium segment of $600 and above. But with no foldable in its portfolio, Apple’s dominance of this segment is strongly challenged by Samsung, the global leader in foldables, and Chinese brands.

China’s foldable market is expected to see significant growth in 2022

The Chinese smartphone market is expected to see big gains in foldable sales in 2022. This, in turn, will prove to be an important factor in pushing the overall growth of the global foldable market in 2022. The Chinese foldable smartphone market saw a sales volume of 0.67 million units in Q1 2022 to register 391% YoY and 152% QoQ growth. As foldable sales have maintained their momentum in April and May, China’s foldable market is expected to grow 225% YoY to reach 2.7 million units in terms of shipments.

China Smartphone Sales Trends

Patriotic consumption or brand recognition or product quality?

The Chinese foldable smartphone market’s growth in 2022 will make clear the market’s characteristics, like the preference for domestic brands. The sales volume for the Chinese foldable market for January-May 2022 shows Huawei occupying 50% of the foldable sales in China, followed by Samsung with 20%, and OPPO and Xiaomi in third and fourth places, respectively. vivo has been present in the Chinese foldable market since April 2022 and, based on the April and May sales only, it is showing a good start with a 10.3% market share.

China Foldable Smartphone Market Share by Brand

Source: Counterpoint Foldable Model Tracker

Huawei is aggressively targeting China’s foldable smartphone segment, which accounted for about 7% of smartphone sales in China from January to May 2022. As smartphone sales in China are mainly 5G, Huawei seems to emphasize a new form factor – foldable.

With the overall Chinese smartphone market expected to show weakness in 2022, Chinese OEMs are aiming to strengthen their penetration in the premium segment. Other Chinese brands such as OPPO, Xiaomi, and vivo also focus on foldables to target the Chinese premium market. At least 4-5 new foldable products are expected to be launched in the second half of 2022.

Global foldable leader Samsung is also expected to strengthen its position in the Chinese market. The new Galaxy Z series coming in Q3 2022 is expected to perform better than its predecessor, thanks to the rising popularity of foldables in China.

Clamshell-type foldables’ influence is expected to increase in China in 2022

The sales volume of book-type foldables in the Chinese market was significantly higher than that of the clamshell type until 2021. Looking at the sell-through trend for January-May 2022, book-type foldables account for about 77% of the sales share for the foldable market, showing a different trend from the overall global foldable market.

China Foldable Smartphone Market Share by Folding Type

Source: Counterpoint Foldable Model Tracker

However, this trend is likely to change in 2022.

The market share of the clamshell type in China remained at 22% until Q3 2021, before Huawei launched its P50 Pocket. But after this launch, the clamshell type started showing a growing trend to reach 46% in Q4 2021. The share is expected to exceed 50% in H2 2022 as new clamshell-type models are launched. Clamshell-type foldables are relatively more accessible due to their low price, besides being easier to carry compared to the book type due to their less weight and size.

Intensifying foldables competition in China to intensify competition in its premium market

Given the recent downward trend in the prices of foldables, the segment is likely to see big growth in the Chinese premium smartphone market in 2022 and 2023. After Huawei’s retreat, Chinese global brands have continuously tried to advance into the Chinese premium market. Therefore, we believe that they will take an aggressive approach with foldables as well. It is here that Apple, currently a strong player in the Chinese premium market, will have to reconsider its market strategies.

Related reports

China Foldable Smartphone Market Trends, 2022

Global Foldable Market Analysis, Q1 2022

Global Foldable Smartphone Market Tracker, Q1 2022: May 2022

Global Foldable Smartphone Market Forecast, Q1 2022: May 2022 Update

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In H1 2021, 5G smartphones accounted for 43.2% of Japan’s total smartphone sales, compared to 26.3% in H2 2020. However, there is a difference between the price segments that drove the 5G smartphone growth during the aforementioned periods. In H2 2020, it was Apple that led the surge in 5G sales with its newly launched 5G capable iPhone 12 series. Apple maintains a smartphone market share of nearly 50% in Japan. But in H1 2021, the situation changed subtly. Even as the iPhone 12 series continued to hold strong, the rapid growth of low- and mid-end 5G smartphones played a more critical role in the overall growth of 5G smartphone sales. Therefore, 5G smartphones are now showing good penetration in all segments of the Japanese smartphone market.

Smartphone Market Shipments and 5G Smartphone Penetration in Japan, 2019-2021

In H1 2021, low-end 5G smartphones in the $250 and below segment recorded an astounding 40% share of the overall Japanese 5G smartphone market, thus playing a stellar role in expanding the 5G market. On the other hand, the iPhone 12 series led the 5G smartphone market in the $400 and above segment. Moreover, in the $400-$799 segment, Google, Sony and Samsung 5G smartphones also performed well.

Intensifying competition among OEMs in the low-end 5G smartphone segment seems to have led to a surge in sales of these phones in Japan. In Q1 2021, many low-end 5G smartphone models were brought to the Japanese market by Chinese manufacturers such as Xiaomi and OPPO. Existing players such as Samsung and Sharp responded to this by quickly launching cost-effective 5G models. Major Japanese telecommunication companies also acted as a growth driver, significantly lowering 5G service prices.

Going forward, premium segment players Apple, Sony and Samsung are expected to target the affordable premium market ($400 and above) along with the $800 and above segment. The low- to mid-end smartphone market is also expected to grow further in the second half. In this segment, competition between Japanese and Chinese brands is expected to intensify. Samsung is likely to target all price bands with its wide portfolio, ranging from the A series to foldable smartphones.

Japan 5G Smartphone Sales Volume by Price Band, 2020-2021

Highlights by OEM

• Apple’s iPhone SE 2020 performed well in H1 2021, becoming the best-selling model in Japan during the period. The iPhone 12 series recorded a market share of 62% in the premium segment. Apple is likely to lead the Japanese market in H2 2021 by launching the iPhone 13 series.
• Sharp is expected to focus on the low- to mid-end segment. Along with the sales of its LTE-based models, the share of its 5G smartphones is also expected to increase in the low- to mid-end segment.
• Samsung rose to third place in the Japanese smartphone market in H1 2021, thanks to the robust performance of mid-priced models in the $250-$399 band. In H2, besides the low- to mid-end segments, Samsung is also expected to focus on penetrating the high-end market with its foldables and the Galaxy Note FE 5G.
• Xiaomi and OPPO performed well in the low-end segment in H1 2021 for both LTE and 5G models. The two OEMs are expected to continue their aggressive moves by launching low- to mid-end models in the second half.

Related Posts

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5. iPhone 13 to Help Apple Grab One-Third of 2021 Global 5G Shipments

The post H1 2021 Sees 5G Smartphone Shipment Share Zooming to 43.2% in Japan Market appeared first on Counterpoint.

Big on image sensors

Image sensors are semiconductors that convert light coming through a lens to a digital signal. These sensors are the major element determining an image’s quality and the number of pixels. Hence, the image sensor’s size is critical to how much detail can be captured from a given shot.

The Galaxy S20 Ultra has a 1/1.33-inch image sensor, larger than in some compact DSLRs (typically 1/2.00-inch – 1/1.70-inch), and we expect competition here to intensify. In the short term, Chinese brands like Huawei, Xiaomi, and OPPO will continue to introduce larger sensors. Huawei P40 Pro Plus already has a 1/1.28-inch sensor but is not available outside of China.

Image sensor size – a rising trend

Hybrid optical the emerging battlefield in zoom

Digital zoom has typically been used in smartphones to enlarge images, but a major issue has been image loss. To overcome this, optical zoom features have increasingly been introduced since 2016 which utilizes multiple lenses. The Galaxy S20 is Samsung’s culmination of these efforts, and its 103mm telephoto lens now rivals those found in DSLRs (100mm-300mm).

Optical zoom by key flagship model

The Galaxy S20 Ultra uses a combination of multiple lenses (referred to as a folded or ‘periscope’ lens) to offer 4X optical zoom, then deploys a “hybrid-optic” 5X-10X zoom function with lossless image by using a combination of sensor cropping and binning technology along with AI multi-frame processing. We recently put the Galaxy S20 Ultra’s cameras through the paces and results are impressive.

This year, we expect competition in high-resolution optical or hybrid optical zoom with lossless image to intensify, with broad adoption of periscope lenses across many flagship models. To enhance lossless zoom, we also expect OEMs to continue with multiple (four to five) sensor implementations.

Linear camera lens array setup

A camera’s lens setup has a significant impact on overall smartphone design. There are various array setups including circular, square, triangle, and linear, with the latter two being most common.

Main camera lens array setups 

Triangle arrays enable quicker image processing as each lens is equidistant to the subject, requiring less processing as the camera switches from lens to lens. Linear arrays provide faster auto-focusing functions by distance measurement based on the difference of images captured by two or more lenses.

With the increasing adoption of ‘periscope lenses’ in premium devices, we expect linear arrays to dominate as they are necessary components of the periscope-based camera platform.

Rising camera module BOM costs

With the camera being one of the most competitive elements of premium smartphones, camera component costs have been rising continuously and we expect its share of BOM to increase in 2020. The Galaxy S20 Ultra has one of the costliest camera setups in a smartphone. It accounts for 21% of the total BOM, after the system-on-chip (Snapdragon 865 or Exynos 990) along with the 5G (X55 5G or Exynos 5G 5123) baseband.

The ability of an OEM to control production costs for camera modules will play a critical role in securing competitive advantage, especially in the 2020 environment where consumer price sensitivity is likely to be higher than normal.

Ratio of camera modules costs within the smartphone BOM continues to rise

Hybrid Optical Zoom to See a Wider Adoption

2020 started with the Galaxy S20 series offering hybrid optical zoom capabilities, and the same can be expected with the flagship Galaxy Note series later this year. The feature could also make its way to some A-series smartphones. Besides Samsung, Huawei with its P40 Pro series and Oppo with Find X2 Pro has also introduced hybrid zoom feature. We are expecting more OEMs to embrace a periscope style lens to include hybrid optical zoom capabilities on the upcoming premium smartphones.

The post Galaxy S20 Zooms in on the Smartphone Camera Trends to Come This Year appeared first on Counterpoint.

Samsung, Intel and Korea Telecom collaborate to bring 5G service experience to the public

5G services are still at the early stage of development, however, at the PyeongChang Winter Olympic Games, Samsung, Intel and Korea Telecom (KT) collaborated to realize the world’s first 5G mass service operation, where visitors could experience 5G services directly.

The partners provided a 4K streaming video service via a 5G network to highlight the massive high-volume and high-speed data transmission potential of 5G. KT provided the 5G data network through a collaboration led by Intel with partners including Ericsson, Nokia and Alibaba, while Samsung unveiled its 5G mobile tablet device to deliver a 4K streaming video via Intel’s base stations.

This is Samsung’s first 5G mobile device. The device worked well for the 4K video streaming service and, at the same time, offered other smart device standard functions. And it was designed to support seamless interworking between 4G and 5G services to expand its service environment even under 4G. The 4K streaming service played smoothly on the test. We did a play-back test on the 4K streaming video. While 4K streaming worked, there is still a long way to go for commercialization. High-frequency transmission loss and the service distance issues have not been fully resolved. In the showcase center, Intel’s base station was installed in the ceiling to provide the 5G network, based on 28GHz. However, the city diorama structure (shown in the photo above) had to be placed on the floor directly below the device to avoid any potential interference between the base station and the device. This suggested to us that the limitations of millimeter wave continue to be an issue.

Samsung’s 5G mobile device delivers a significant move towards miniaturization, although it has not yet achieved smartphone size. However, there are other significant drawbacks besides the size. The device is heavy in comparison with other, similar-sized, tablets, and the device became hot in use. The power source in the device was an 8000 mAh battery, suggesting low power technology for the 5G chip has not been developed yet. Nevertheless, it was operating with a download speed of around 3.7 Gb/s.

5G VR/MR Broadcasting Enables Immersive Media Service at Olympic Games

The service expected to grow most rapidly in the early stages of 5G adoption is VR/MR broadcasting. The PyeongChang Olympic Games demonstrated the feasibility of VR/MR broadcasting via 5G.

With the simultaneous scene capture of numerous cameras in PyeongChang and Gang-neung Olympic park, Intel could utilize its close-to-real time VR rendering technology to deliver VR video. This could potentially provide end-users with a 360 degrees interactive view of sports events in near-real-time. At the PyeongChang Olympics, the VR video service was not displayed to the public, but it was used for record judging and for replay on the display board inside the stadium. Although the service was only available at short-track games due to technical and budget limitations, it is easy to see how its application could be expanded in the future. This could bring to life the concept “as good as being there” as a future revenue model for 5G technology application.

Sync-view, Bobsleigh and 360° Camera

The bobsleigh event provided the opportunity for another enhanced broadcasting method enabled by 5G. The camera installed in the bobsleigh provided a real-time view of the athlete’s angle of vision. In addition, the 360° camera installed at the race track captured the entire race successfully without missing any moment. 5G made it possible to transmit this massive data in a real time, providing an even more satisfying viewing experience for TV viewers than for the live audience at the scene.

UIYAJI, Wind Village – 5G Applications for Rural Services

UIYAJI, a mountain village above PyeongChang was the site of a 5G installation built by KT, Intel, Samsung and Nokia to test the viability of 5G for rural applications. UIYAJI Village was transformed from the countryside where no prior internet connection was installed. 5G brought connectivity to the village for the first time.

The 5G network was installed in a fixed wireless mode by using the café and the educational center in the village as two major access centers. In the café, users can enjoy 5G related services, such as a tourist information service based on AR, a media wall where the gesture recognition is applied as a user interface, supporting previously filmed village image through a drone.

In UIYAJI, 5G technology is also used for a pest control system. The system can detect animals using dispersed embedded sensors and then activate a defense system that uses sound, voice, or scent to repel unwelcome animals. In UIYAJI, radar and CCTV devices are used to detect pests such as wild pigs and take appropriate actions to reduce or prevent crop destruction.

Augmented Reality (AR) services on 5G technology create another potential application – that of enhanced remote shopping experiences. The use of a 360-degree camera with an overlay of information can create a shopping environment for the buyer that is similar or even better than being physically present. This kind of service could be adjusted to suit auction type transactions with multiple buyers. Possibilities for remote auction capabilities include agricultural livestock, fish auctions, and house sales. The benefits of remote auctions include more participants and more easily verifiable information than being physically present.

Beyond PyeongChang, what next for 5G?

Korea Telecom is working with partner companies to achieve early commercialization of 5G in 2019. Through the PyeongChang / UIYAJI Village projects, KT has gained the experience to build and stabilize a 5G communication network and broadcasting network.

One of the most important challenges for KT has been to change people’s perception of the need for 5G services. Before the installation in UIYAJI, villagers were dismissive of the new technology. However, when the residents started to use the 5G services they began to realize the potential benefits to their way of life. The participation of residents has also helped the partners develop the service offering beyond the original plans.

We expect 5G to start to be commercialized by early 2020 – likely among the first adopting countries. However, we expect it will take until around 2022 before 5G-based lifestyle-changing services become available in Korea and more broadly.

Please feel free to contact us via the contact form by clicking here for further questions regarding our in-depth latest research.

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Messaging platform KakaoTalk has successfully entered the banking industry in Korea after obtaining a license from the regulator FSC in April this year. It was designated as one of the two online-only banks in the nation. This will likely be a critical disruption to a sector that has enjoyed a long period of stability but has lacked innovation.

KakaoBank was established in January 2016. It is led by chat platform KakaoTalk which has a 10% stake but the major shareholder is Korea Investment Holdings, a major financial group in Korea. It has positioned itself as a mobile only bank with no physical branches. All activities occur over the app which is a natural extension from its main messaging app KakaoTalk. KakaoBank fully leveraged the advantage of being linked to the leading messaging platform in Korea, KakaoTalk which is used by 42 million users out of the 50 million population in Korea.

Within just 24 hours of opening on July 27^th 300,000 new accounts were opened with KakaoBank (this is more than what all other Korean banks got in 2016 through online channels). The number continued to rise throughout August. We estimate KakaoBank took close to 45% market share in all new bank accounts opened in August – including both offline and online. If we only count the mobile internet based accounts it was almost a 70% share. It extended US$1.2 billion in credit loans during August and this again accounted for 40% of the country’s total loans during the month.

Opening a bank account only took 5-7 minutes on average and the only document required was a photo of your ID card. This is revolutionary as it saves the time and effort of visiting a bank, waiting in line and then filling out lengthy forms.

KakaoBank Daily User growth

The ease of opening an account was not the only selling factor, KakaoBank also offered loans with interest rates that were as low as 2.86% compared to the 6-19% range of traditional banks. The approval process was also as quick and easy as the account opening.

The third factor was the low commission fee on overseas money transfers. The rate offered was as low as US$5 which is again almost much lower than traditional banks, so it was hard to think of a reason not to open a KakaoBank account. The fourth factor was the relatively high deposit rate which was 1.2% in annualized rates.

Opening an account using KakaoBank

There were some skeptics on the quality of KakaoBank’s customer base, but those figures look solid as well. Over 70% of the customers have also applied for a bank check card which shows the actual usage rate of the bank accounts. Also 88% of the loan applicants have high credit scores meaning their credit is good enough for competitive rates.

KakaoBank’s revolution can be summarized in two words, “speed” and “convenience”. Consumers had been waiting for innovation to come to the finance sector and KakaoBank has delivered this by offering speed and convenience through a smartphone. KakaoBank took advantage of its dominant messaging platform, KakaoTalk, which lowered its marketing expenses and brought a feeling of security through the familiarity of the brand. We expect KakaoBank to enter the list of top six or seven banks in the country by next year.

Despite initial success, KakaoBank will have to stay alert as there will be many challenges ahead. The lucrative mortgage loan market remains untouched as the mobile-only screening is not sufficient. Also, the existing customer support cannot keep up with the growing client base, so there needs to be constant investment in the infrastructure to scale with demand.

As KakaoBank grows to a sizeable level, regulatory issues are bound to arise. The government might realize that there are needs to implement stringent compliance measures and screening processes as there is always a risk of identity theft and fraud. Such cases could potentially increase with the growing client base.

It’s a good start for a new breed of bank born purely from mobile and the net interest margin of 2.5%, which is the difference between the loan interest and the savings, looks good for healthy growth. Since the birth of smartphones, there has been a mobile revolution going on and there will be no industry left undisrupted. The finance industry is no exception. In contrast with the success of KakaoBank, Citigroup has announced plans to shut down almost 70% of its branches in Korea this year and Standard Chartered is also considering reducing 25% of its branches in the country. With KakaoBank in business, this trend will only be accelerated. Korea is just one example and this may now happen in China, Europe, Japan and anywhere else in the world where there is a high rate of penetration of digital banking. Korea has been considered as an economy with the highest penetration of digital banking, with 96% of the population using online banking in 2014, which made it ripe for innovation. We believe that the financial industry just might have had its iPhone moment but in a small unnoticed market first. We will see more internet startups entering the financial industry now, challenging traditional brick-and-mortar banks.

The post How a Messaging App Challenged Traditional Banks and Captured 45% of the Market appeared first on Counterpoint.

Rumors are spreading that Japan’s Fujitsu has decided to sell its subsidiary operating the mobile phone business. The bidding process may start next month. Fujitsu already categorized its mobile phone business as non-core and spun-off the division into a subsidiary in February 2016. Fujitsu has now decided to sell-off the entire handset business.

In early 2000, there were about 11 Japanese companies involved in the handset sector, including Fujitsu. Japanese handset makers grew to almost 20% of the global handset market at its peak. The domestic market was dominated by these local brands. Japanese brands ruled the local market with more than 80% for a long time. Since 2009, however, Japanese makers began to struggle due to the rapid growth of Apple. Japanese makers slowly exited the global market and their share declined. This happened even in the Japanese market to around 30%.

Japan Handset Market Share by OEM origin

Macroeconomic factors of the Japanese economy seem to have influenced the Japanese mobile phone companies to some extent. The aging of the Japanese society progressed rapidly and Japanese companies showed a tendency to avoid big changes. Japanese makers focused more on feature phones, despite the fact that smart phones were already attracting attention. And this tendency of Japanese companies continued until 2016.

2009 is the year the Japanese handset market had finally started to change from a feature phone market to smartphones. Yet Japanese companies did not respond actively. This phenomenon accelerated each year and now the share of smartphones sold among overall handsets has exceeded 90% for the first time during 2017. Of the original 11 Japanese mobile phone companies in early 2000, only five companies, remain including Sony and Kyocera.

External changes in the market are important but the response or internal strategies of a company are important factors determining success and failure as well. Japanese companies are building a product portfolio centered on mid- to low-end products, so operating margins are lower than previous generation products. Japanese makers have fallen into a vicious cycle in which they are forced to change their R & D investment more conservatively due to a drop in market share and a drop in sales margin. Considering the needs of customers, investing in the latest technology is an important factor to succeed in the mobile phone business.

According to our analysis on model sales, only Sony has a 50:50 ratio of premium and mid-tier phones, while Sharp and Kyocera focus on mid-tier products in the Japanese market. Currently Sharp and Kyocera’s earnings are not bad as demand for mid-end phones has soared since the transition from feature phones to smartphones has been rapid. However, in the a long-term, demand for premium phones may rise as first time smartphone users show a trade-up trend. If Japanese makers do not act accordingly, more may follow Fujitsu’s exit.

The Japanese handset market is changing – The proliferation of smartphones, Price diversification, and the exit of marginal players

Analysis of the handset market share in the Japanese market clearly shows that the market is changing. In 2016, Fujitsu’s market share in Japan was about 7%, ranking fourth, and Fujitsu’s main products were targeting the >$400 price band. Customers belonging to the >$400 price band will likely be absorbed by Apple, Sony and Samsung.

[2017 Q2 Japanese Smartphone Shipments]

Apple, the strongest player in Japanese market, is also targeting the mid-range market with its iPhone SE and iPhone 6. Failure to fully address all segments of the market will lead to remaining players getting squeezed out almost entirely.

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