Counterpoint: Foldable Market Declines In Q3, Samsung's Lead Shrinks

Counterpoint Report

The global foldable smartphone market experienced its first decline since analysts began tracking the segment, as revealed by Counterpoint Research. Total shipments for foldables in Q3 2024 dropped by 1% year-over-year, signaling a slowdown in the once-booming market. Despite maintaining its position at the top of the foldable smartphone market, Samsung’s market share saw a notable contraction, even with the launch of its latest foldable flagships, the Galaxy Z Fold6 and Galaxy Z Flip6.

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Samsung’s Struggles: Sales Below Expectations

Although Samsung continues to lead the foldable market, the company faced challenges in Q3. The Galaxy Z Fold6, its flagship phablet-style foldable, saw only modest sales, while the Galaxy Z Flip6—a popular clamshell-style device—failed to match the sales figures of its predecessor from the previous year. One of the key factors contributing to Samsung’s decline in market share is increasing competition from other manufacturers, particularly those offering more affordable foldable options.

Rising Competition: Xiaomi, Motorola, Honor, and Huawei

In stark contrast to Samsung’s struggles, Xiaomi, Motorola, Honor, and Huawei emerged as major beneficiaries in Q3, experiencing significant shipment increases compared to the same period in 2023.

Motorola, in particular, saw impressive growth, largely thanks to the launch of the Razr 50 and Razr 50 Ultra, which come with a more competitive price tag of under $1,000. These models have attracted a significant number of buyers looking for a high-quality foldable phone at a more accessible price point.

Honor made waves with its Magic V3, an ultra-thin foldable that has generated strong interest, especially in Asian markets. The company’s rapid rise is attributed to its ability to offer competitive pricing and cutting-edge technology in the foldable space.

Xiaomi recorded the highest year-over-year (YoY) shipment growth in the foldable market. This surge was primarily driven by the launch of its Mix Flip, marking the brand’s expansion into international markets. Prior to this, Xiaomi’s foldables were only available in China, so the company’s entry into international markets has played a significant role in boosting its sales.

Huawei, although primarily focused on the Chinese market, has also enjoyed growth in foldables. The company continues to perform strongly in its home country with the Mate X5 and the clamshell-style Pocket 2. Huawei has also seen positive reception for the Nova Flip and its more ambitious Mate XT Ultimate, a tri-fold device. However, these devices remain limited to the Chinese market, restricting their international impact.

Key Takeaways and Market Outlook

While Samsung remains the leader in the foldable market, its position has been challenged by the growing competition from other smartphone manufacturers. The decline in overall shipments reflects a slowdown in consumer demand for foldables, a category that had once been seen as the future of smartphones. The strong performance of brands like Xiaomi, Motorola, Honor, and Huawei suggests that consumers are looking for more affordable options or cutting-edge features that Samsung’s offerings might not fully address.

Looking ahead, the foldable market faces several challenges:

Price Sensitivity: As more affordable foldables enter the market, Samsung’s premium pricing strategy may struggle to maintain its dominance.

Innovation vs. Incremental Updates: Many of the latest foldable models offer incremental upgrades rather than groundbreaking innovations, which could limit consumer excitement and adoption.

Regional Focus: While Samsung’s global reach remains unmatched, competitors like Huawei and Xiaomi are focusing on specific markets (like China) where they can gain a larger share before making their international push.

For Samsung to regain momentum in the foldable market, it may need to focus on competitive pricing, significant innovation, and enhancing the value proposition of its foldable devices to stand out in a market that is rapidly diversifying.

FAQs

1. Why did the foldable smartphone market decline in Q3 2024?

The global foldable smartphone market saw its first-ever decline due to a 1% drop in shipments compared to the same period last year. This slowdown may be attributed to factors such as price sensitivity, incremental innovation rather than groundbreaking updates, and matured consumer interest in foldable devices. The market is also facing strong competition from affordable alternatives and rising consumer caution around new technology.

2. What is the current position of Samsung in the foldable market?

While Samsung remains the leader in the foldable smartphone market, its market share has shrunk significantly. Despite launching flagship devices like the Galaxy Z Fold6 and Galaxy Z Flip6, Samsung’s sales did not meet expectations. The Z Flip6 in particular struggled to match the success of its predecessor, signaling that other brands may be gaining ground.

3. Which brands showed significant growth in Q3 2024?

Several competitors saw substantial growth in shipments compared to the same period last year:

Motorola with its Razr 50 and Razr 50 Ultra models, offering foldables at more affordable prices.

Xiaomi recorded the highest YoY shipment increase, especially after launching the Mix Flip outside of China.

Honor, with the Magic V3, which is popular for its ultra-thin design.

Huawei, particularly in China, with its Mate X5, Pocket 2, and new foldables like the Nova Flip.

4. What factors contributed to Samsung’s declining market share in foldables?

Several factors contributed to Samsung’s decline:

Strong competition from brands like Motorola, Xiaomi, and Honor, which offer more affordable and feature-packed foldables.

Underperformance of the Galaxy Z Flip6 compared to its predecessor.

The rise of more innovative foldable devices from other brands, such as Xiaomi’s Mix Flip and Honor’s Magic V3, which offer different form factors or cutting-edge designs.

5. How does Huawei’s growth in foldable shipments impact the global market?

Huawei’s growth is mainly confined to China, where it enjoys strong sales with models like the Mate X5 and the Pocket 2. However, its recent releases, such as the Nova Flip and Mate XT Ultimate tri-fold, have proven popular domestically, contributing to Huawei’s increased shipments. Since these devices are not yet available internationally, Huawei’s influence on the global foldable market remains limited for now, but it remains a strong player in the Chinese market.

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