Another brand plans to descend on SA’s foldables market

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 22 Aug 2023
Global foldable smartphone shipments are expected to reach 55 million units by 2025.
Global foldable smartphone shipments are expected to reach 55 million units by 2025.

With the expansion of the flagship smartphone segment to encompass foldable smartphones, South Africa is becoming a favoured destination to launch these devices.

Chinese smartphone brand Honor, which debuted its foldable Magic V smartphone at Mobile World Congress 2023, plans to bring the device to SA next year.

This was revealed by Daniel Wang, president of Honor MEA, speaking to South African media in Dubai last month.

He said the company plans to bring its full range of products, including flagships such as its latest Magic V2 foldable smartphone, to the country. He didn’t share further details on the plans to launch locally.

Wang noted 100 000 pre-orders were received within the first few hours of the Magic V2’s launch in China.

Smartphone original equipment manufacturers (OEMs), such as Samsung, Huawei and Oppo, have also unveiled foldable devices in the South African market.

The Counterpoint market research firm forecasts strong global foldable smartphone growth, with shipments expected to quadruple between 2022 and 2025, to reach 55 million units.

It says China, North America, Europe and South Korea are the largest foldable smartphone markets in the world, collectively accounting for over 80% of the global market in 2022.

Counterpoint adds that foldable smartphones have become a bright spot in the declining global smartphone market, exhibiting strong growth in 2022, albeit from a low base.

Growing appetite

Arnold Ponela, senior research analyst at IDC, says foldable phones are starting to attract consumer attention, with shipments gradually increasing each year.

“The adoption of foldable devices continues to grow, despite the initial setback we witnessed with the first batch of foldables unveiled back in 2019, which featured high price points and build quality issues.

“Despite their small market share, foldables represent a major opportunity for vendors. From the consumer point of view, foldables represent the most innovative visual change to happen to smartphones, and therefore it is a segment that cannot be ignored by vendors.”

Christopher Henschel, director at Cellucity Group, comments that the South African foldable market is still relatively niche, as the devices attract a relatively high price premium.

“Foldables represent a very small fraction of the market at present, as they are focused on the upper-end, premium sector, with most devices in excess of R25 000, topping out at around R50 000.

“While the form factor has distinct advantages, the current technology being used still tends to leave the devices on the bulkier side, which is a key consideration for many potential users.”

Ponela says the high price point remains one of the major inhibitors of the category's overall growth, as prices are elevated compared with standard smartphones.

“Foldables remain nearly three times higher in price than non-foldable devices, which is a hard sell to the average consumer, particularly in a developing market like SA.

“Even though Samsung has controlled most of the market, new vendors have made announcements regarding the launch of upcoming foldable products. Increased competition will help drive prices down and improve product builds, as consumers will have more options for foldables.”

Henschel adds: “As the technology improves and the devices become more attractive and useable, we will see the economies of scale making the tech more affordable and moving into the mid-tier sector. It will, of course, be a game-changer should/or when Apple starts looking at the form factor, to drive demand even more.”

Arnold Ponela, IDC senior research analyst for mobile technologies and image printing and document solutions for SA and Sub-Saharan Africa.
Arnold Ponela, IDC senior research analyst for mobile technologies and image printing and document solutions for SA and Sub-Saharan Africa.

Samsung pioneered foldable devices in the smartphone market by introducing its Galaxy Fold in 2019. Since then, Huawei, Oppo, Xiaomi and Honor have followed suit.

Justin Hume, vice-president of mobile experience at Samsung SA, speaking to ITWeb on the sidelines of the July launchof Samsung’s fifth-generation foldables series, noted the smaller, foldable form factorhas huge appeal to consumers.

“Normally, on a mobile contract a consumer would be upgrading every 24 or 36 months. The fold category of customers is almost upgrading with every iteration of the product. On average, it is sitting on 18 months, which is incredibly quick.

“People that are buying these products want the innovation; they love the form factor and design.”

He highlighted that the question of durability has dogged the foldable smartphone category since inception; however, OEMs are going to extra lengths to reassure consumers.

According to Hume, from the time Samsung brought out its Galaxy Fold, it has gone from “selling a few thousand devices in the first few months, to a few thousand every week” in the local market. Resultantly, Samsung has more than 95% of the foldables market in SA, he noted.

“We relish the fact that competitors are coming into this market; it further cements Samsung’s view that this is a thriving market and brings legitimacy to the fold category.”

Justin Hume, vice-president of mobile experience at Samsung South Africa.
Justin Hume, vice-president of mobile experience at Samsung South Africa.

Ponela and Henschel agree that foldable smartphones have a solid advantage, which is why OEMs are heavily investing in this segment.

Says Henschel: “In SA, for many consumers their main multimedia device for streaming content is their phone. As the technology improves and becomes more affordable, this category presents the market with a ‘one device’ solution, as opposed to phone and tablet setup, or phone and laptop setup, for more simple office-related functions.”

Ponela comments: “In 2022, foldable smartphones grew, despite the overall market’s decline. Samsung is the leader in SA’s foldable smartphone market, with a market share of over 90%, owing to the success of its Z Fold and Z Flip series.

“An increasing number of vendors have expressed interest in incorporating foldable phones into their offerings, fuelled by the potential for enhanced profit margins. The favourable growth of foldables shows product innovation is still able to make consumers open their wallets.”