Q3 2024: Domestic Chinese Foldable Phones Show Counter-cyclical Growth, Challenging Samsung's Hegemony

Q3 2024: Domestic Chinese Foldable Phones Show Counter-cyclical Growth, Challenging Samsung's HegemonyThe third quarter of 2024 proved to be a celebratory period for Chinese manufacturers of foldable smartphones. While the global foldable phone market experienced a 1% year-over-year decline in shipments, ending six consecutive quarters of growth, Counterpoint Research reports that Chinese brands achieved remarkable counter-cyclical growth

Q3 2024: Domestic Chinese Foldable Phones Show Counter-cyclical Growth, Challenging Samsung's Hegemony

The third quarter of 2024 proved to be a celebratory period for Chinese manufacturers of foldable smartphones. While the global foldable phone market experienced a 1% year-over-year decline in shipments, ending six consecutive quarters of growth, Counterpoint Research reports that Chinese brands achieved remarkable counter-cyclical growth. This phenomenon reflects breakthroughs in product innovation, market strategy, and global expansion by domestic manufacturers, while also highlighting the challenges and difficulties Samsung faces in the foldable phone market.

Samsung's Foldable Phone Sales Plummet: Insufficient Competitiveness of New Products and Failure in the Chinese Market

As the global leader in the foldable phone market, Samsung suffered a significant 21% year-over-year decline in sales in Q3 2024, its market share plummeting from 70% in Q3 2023 to 56%. This dramatic drop can primarily be attributed to two factors:

1. Insufficient Competitiveness of New Products: The release of the Samsung Galaxy Z Fold6 and Galaxy Z Flip6 failed to generate the expected market excitement. While the Galaxy Z Fold6 saw improvements in weight and thickness, the overall feel wasn't significantly enhanced, and other performance upgrades were relatively limited, with no changes to the camera module's hardware specifications. Despite a brighter 2600-nit outer screen and a more powerful Snapdragon 8 Gen 3 processor, the high price tag exceeding $1899 (13999 RMB in China) offered insufficient incentive for Galaxy Z Fold5 users to upgrade.

2. Failure in the Chinese Market: Samsung's performance in the Chinese foldable phone market has consistently been underwhelming. Canalys data shows Samsung's overall market share in China is less than 2%, with an even smaller share in the foldable phone segment. Failing to capitalize on the fastest-growing foldable phone market globally is a major contributor to Samsung's sales decline. Despite years of effort to boost sales in China, Samsung has seen minimal success. Failure to achieve a breakthrough in the next two years could see Samsung's global foldable phone market share fall below 50%.

The Rise of Domestic Chinese Brands: Xiaomi, Motorola, Honor, and Huawei Surge

Samsung's sales slump didn't lead to a complete contraction of the global foldable phone market, largely thanks to the powerful rise of Chinese brands. Xiaomi, Motorola (Lenovo), Honor, and Huawei all achieved over 100% year-over-year growth in Q3 2024, becoming crucial pillars supporting the global market.

Specifically:

• Xiaomi: Achieved a staggering 185% year-over-year growth, making it the fastest-growing brand. This is largely attributed to the July launch of the MIX Fold4 and MIX Flip, with the MIX Flip, Xiaomi's first clamshell foldable phone, quickly becoming a market sensation thanks to its excellent design, performance, and successful marketing strategies (such as the capybara standby animation).

• Motorola: Saw a 164% year-over-year growth driven by both domestic and international markets. In China, the razr 50 series covered a wider user base through different price points, while Lenovo's continuous optimization of AI features enhanced user experience. Overseas, the razr 50 series garnered positive reviews with its new Pantone color designs.

• Honor: Experienced 121% year-over-year growth, primarily due to the successful launch of the Magic V3. Its excellent design made it popular in the domestic offline market; while maintaining a slim profile, the Magic V3 also featured a large-capacity battery and a high-performance camera system, improving the overall user experience.

• Huawei: As the leading brand in the Chinese foldable phone market, Huawei also saw a 23% increase in shipments.

Overall, Chinese manufacturers' combined market share reached 38%, narrowing the gap with Samsung's 56% to just 18%. In contrast, in Q3 2023, even the combined share of Huawei and Honor was only 18%, significantly lower than Samsung's. This data clearly demonstrates the continued high-speed growth of domestic Chinese foldable phones.

In terms of product, Xiaomi, Motorola, and Honor's new products showcased clear advantages over the Samsung Galaxy Z Fold6 and Galaxy Z Flip6 in terms of design and hardware specifications. Offering more competitive pricing against the higher-priced Samsung products, this partly explains Samsung's continued underperformance in the Chinese market.

Chinese Foldable Phones Go Global: Honor Takes the Lead

To compete more fiercely with Samsung in the global market, Chinese manufacturers are increasingly focusing on overseas markets. Brands like Xiaomi and Honor are actively pursuing their globalization strategies, achieving initial success.

Honor's performance in the Western European market in Q2 2024 was particularly outstanding, surpassing Samsung to become the leading brand in the region (the second largest foldable phone market after China). Its global shipments grew by a remarkable 455% year-over-year in Q2, contributing 70% of the growth in the Western European market. At IFA in September, Honor launched several products for the European market, including the Magic V3, and fully integrated Google Cloud services, further enhancing user experience.

GSMArena data also shows that the Honor Magic V3 garnered 633,840 views, representing 7.2% of total views, surpassing even the Motorola razr 50 series, second only to Samsung's two foldable phones. GSMArena editors praised the Magic V3 for its excellent slim design and screen quality, which was deemed as good as, or even better than, the Samsung Galaxy Z Fold6.

Counterpoint's report further indicates that Honor's market share in Europe has risen to 4%, with a 30% year-over-year increase, ranking fifth and leading the industry in growth rate. This further corroborates the initial success of Honor's foldable phone globalization strategy.

While Samsung still dominates overseas markets, domestic Chinese foldable phones are gradually eroding its market share. Advantages such as faster charging speeds, superior design, and feel have been recognized by overseas consumers and review agencies. As Chinese manufacturers reach patent settlements and acquisition agreements with brands like Nokia and LG worldwide, the globalization of Chinese foldable phones will further accelerate, promising greater breakthroughs in the future.

In conclusion, Q3 2024 data shows a booming domestic Chinese foldable phone market, posing a growing challenge to Samsung's market position. With improved product competitiveness and the advancement of globalization strategies, domestic Chinese foldable phones are poised to capture a larger share of the global market in the coming years.