Samsung Electronics, which had over 80% market share in the foldable phone market and was an 'absolute powerhouse,' recently fell to 3rd place due to the price-performance offensives of Chinese companies. To make matters worse, Apple is expected to release its first foldable phone soon, further narrowing Samsung's position. In China, where more than half of the world's foldable phones are sold, Samsung has been overshadowed by local companies' price-performance ratios, and in the United States, Apple's new foldable phone could displace Samsung.
◇ Chinese companies, riding the wave of patriotic consumption, surpass 70% market share in the global foldable phone market for the first time
According to industry reports and market research firm Counterpoint Research on the 8th, Chinese companies' market share in the global foldable phone market exceeded 70% for the first time in the second quarter of this year (based on shipment volume). Chinese companies Huawei and Motorola (acquired by China's Lenovo from Google in 2014) captured 1st and 2nd place with 45% and 28% market shares, respectively. The combined market share of these two Chinese companies reached 73%. Compared to the same period last year when their market share was 46%, this represents an increase of 27 percentage points in just one year. In contrast, Samsung Electronics' market share in the foldable phone market in the second quarter of this year dropped to 9%, down 12 percentage points from 21% in the second quarter of last year, landing in 3rd place. After initially conceding 1st place to Huawei in the first quarter of last year, Samsung has now been overtaken by Motorola for the 2nd place within a year.
The rapid dominance of Chinese companies in the foldable phone market can be attributed to the spreading trend of patriotic consumption in China, the largest foldable phone market in the world. According to Counterpoint Research, China's share of the global foldable phone market in the second quarter of this year was 56% (based on shipment volume). This means that 5.6 out of every 10 foldable phones sold were in China. An industry official noted, "The deepening U.S.-China conflict has led to a rise in patriotic consumption to protect domestic brands within China, causing the market share of Chinese companies to rapidly increase, and thus their global market share has surged as well," stating, "It is difficult to find foreign companies in the Chinese foldable phone market."
According to market research firm IDC, Huawei's market share in the Chinese foldable phone market reached 75% in the first half of this year (based on shipment volume). It was followed by Honor (8.4%), Oppo (6.1%), Xiaomi (3.7%), and Vivo (3.0%). The market share of other companies, including Samsung Electronics, was only 3.8% in China. Just two years ago, Samsung Electronics' market share in the foldable phone market in China was 28.8%, but now it is said to have lost its presence.
◇ Samsung under threat from value-for-money competition... risk in the North American market when the folding iPhone arrives
Value for money has also bolstered the offensive of Chinese companies. The base model of the Chinese Motorola foldable phone, the 'Razr 60,' has a launch price of $699 (approximately 970,000 won) in the U.S., making it 37% cheaper compared to the launch price of Samsung Electronics' recently released Galaxy Z Flip7 ($1,099, approximately 1,530,000 won). Morris Klene, a lead researcher at Counterpoint Research, mentioned, "The new Motorola product (Razr 60) is currently the cheapest foldable phone in the U.S., and there aren't any competing products that come close to this price yet."
Chinese company Huawei has launched not only high-priced foldable phones exceeding 2.5 million won but also affordable foldable phones in the 800,000 to low 1 million won range. In contrast, Samsung Electronics' new foldable phones, the Galaxy Z Flip7, are priced starting at $1,099 (approximately 1,530,000 won), and the Galaxy Z Fold7 starts at $1,999 (approximately 2,780,000 won) in the U.S.
In this situation, Apple's entry into the foldable phone market could pose a burden for Samsung Electronics. This is because Samsung's market share for foldable phones could plummet in North America and Europe, where Apple has a strong presence. An industry insider stated, "The influence of the iPhone is absolute in the North American market, including the U.S.; if Apple releases a new foldable phone, Samsung Electronics will find its position in its key market, North America, even more constrained." According to Counterpoint Research, North America accounted for 20% of the global foldable phone market in the second quarter of this year (based on shipment volume), making it the second largest after China.
◇ "Samsung's reversal strategy is to enhance value for money"
Industry experts advise that in order for Samsung Electronics to regain lost market share in the foldable phone market, it must first address the 'price' issue. They believe that it needs to secure value for money to compete with Chinese companies. In particular, as tariffs are expected to be imposed in the U.S. market, failing to lower prices could make it difficult to maintain market competitiveness. Kim Yong-seok, a distinguished professor at Gachon University (former executive at Samsung Electronics), said, "The market response to the Galaxy Z series has been positive, so some recovery might be possible in the second half of the year; however, to achieve continuous market share expansion, a strategy to enhance value for money is necessary," and added, "It is essential to diversify product price ranges by reducing costs through the integration of Exynos and launching affordable foldable phones."
Meanwhile, Samsung Electronics incorporated its self-developed mobile application processor (AP) 'Exynos 2500' for the first time in the Galaxy Z Flip7, which was released in July. This is the first time Samsung has adopted Exynos AP in its foldable phones.