Foldable Smartphone Sales Will Grow in 2023, But Don’t Get Lost In The Hype

The numbers are exciting, but growth in foldables can’t ​“save” the smartphone market.

2023 looks set to be another challenging year for wireless retail. In addition to the complex impacts of inflation and supply chain disruption, weakening consumer demand is rocking the smartphone market as refresh rates are surpassing 40 months in most major markets. According to research by IDC, smartphone shipments were down 18.3% year over year in Q4 and were down 11.3% in 2022 overall — with the lowest number of annual shipments since 2013.

“We have never seen shipments in the holiday quarter come in lower than the previous quarter,” said Nabila Popal, research director with IDC’s Worldwide Tracker team. ​“However, weakened demand and high inventory caused vendors to cut back drastically on shipments. The weaker-than-predicted Q4 numbers put previous predictions for a 2.8% recovery in 2023 ​“in serious jeopardy”.

Yikes.

The notable exception to these gloomy numbers? Foldables – which grew from 9.1 million shipments in 2021 to 14.9 million in 2022.

Foldables are the only smartphone segment predicted to grow in 2023.

This year, foldables are predicted to rise above 20% penetration of the ultra-premium smartphone category (phones that cost $1000+). As for total sales, analysts are varyingly optimistic, predicting between 30% growth (DSCC) and 52% (Counterpoint Research), with increasing competition anticipated to put downward pressure on prices.

In 2022, the category was still nearly entirely dominated by Samsung, which had 82% market share. However, that lead will start to dry up as HONOR, Motorola, and Xiaomi are expected to get serious with foldable offerings outside of China. Additionally, Huawei, OPPO, and Vivo are expected to launch new foldable products this year.

Always the elephant in the room, Apple is notable in its silence regarding plans for a foldable offering, but given that Apple has both filed for and been issued several patents for foldable smartphones and tablets, it seems safe to assume that an Apple foldable will hit the market eventually.

Given the overall gloomy outlook for smartphones in 2023, these growth projections can sound really exciting! But it’s important to maintain a sense of perspective. Why? There are two reasons.

It’s easy to have huge growth in a tiny market segment.

Compared the rest of the market, the number of foldables being sold is still miniscule — the 9.1 million foldables that were shipped in 2021 represented only 0.7% of total smartphone shipments for the year. When you’re dealing with numbers that small, it’s easy to have a huge percentage of growth result in what is still a pretty tiny number.

2. Uncertainty of demand begs the question: trend or fad?

While we acknowledge that social media isn’t exactly scientifically rigorous, when we asked if people could see themselves buying a foldable smartphone in the next two years, the responses were pretty tepid. Out of 127 responses, only 18% said ​“yes, absolutely”. More than half (55%) said no, with the remaining quarter (27%) answering ​“maybe”. Which isn’t exactly ringing enthusiasm.

Foldables are also new enough as a category to ask the question: are they a trend or a fad? Industry watchers have thrown term ​“phablet” around a lot since the Q3 launch of the Galaxy Z Fold4. But phablets are a fad that has already come and gone. From 2013 to 2015, many media outlets breathlessly predicted that ​“phablets were here to stay”, including Fortune, HuffPost, and Ars Technica.

Were they? Not exactly. Google Search Trends graphs of the term from 2010 to present tells a pretty definitive story:

It’s possible that in the coming years, increased choice and falling prices as well as the added benefit of new form factors offered by foldables might accelerate consumer demand for foldables. But whether they’re here to stay or not, foldables won’t be ​“saving” the smartphone market any time soon.