tech

This year's smartphone market has welcomed a long-awaited recovery, with continuous positive growth giving the industry confidence. However, compared to the past where brands like Apple and Samsung absolutely led the way, with the rise of domestic Chinese phone manufacturers, Chinese brands are gradually taking the dominant position in the direction of innovation.

From imaging to fast charging, to heat dissipation and even satellite communication, brands like Huawei, Xiaomi, and vivo have a stronger say. Not only that, in the high-end category of folding screens, Chinese phone manufacturers have also taken the lead in aspects such as thinness, imaging, and hinge capabilities. In the first quarter of this year, in terms of sales, Huawei achieved an absolute surpass of Samsung, and brands like Honor are also in the fast growth track, ranking in the top three.

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Recently, there have been reports that Huawei is about to release a triple-folding screen phone, and Yu Chengdong has also exposed this new machine in public on multiple occasions, which will also be the first mass production launch of this form of folding screen. Previously, several brands, including TCL and BOE, which are part of the upstream supply chain, have shown triple-folding prototypes, but they are all at the concept stage.

For Huawei, the release of the triple-folding screen is a show of technical prowess, and also a "sample" that goes hand in hand with the commercialization of the native HarmonyOS. As a pioneer, it is naturally also a market competition, and how to balance the price and the product will be a great test.

More importantly, in today's fast iteration and development of folding screens, the mass production release of Huawei's triple-folding screen is also an upgrade and surpass of the domestic supply chain. From core technologies such as panels to hinges, China's industrial chain is at the forefront of the array.

Huawei's triple-fold exposure, related concept stocks and scalpers are the first to get excited.

"The next generation of Huawei's folding screen, others can think of it, but they can't make it. We have been thinking about it for five years, and it may finally be coming out soon." In a live broadcast with Dong Yuhui in July, Yu Chengdong revealed that this product is also considered by the market to be Huawei's triple-fold phone.

As early as March, the China Patent of the State Intellectual Property Office announced Huawei's "folding screen device" patent, with the application date being February 21, 2023. The content shows that the patent uses a triple-fold design, multiple shells can have different thicknesses, reducing the thickness of the device in the folded state, and also making its weight lighter, thus providing users with a better grip feel.

Earlier in the market, there was news that Huawei would launch its first triple-folding phone in 2024, equipped with the Kirin 9 series platform, using dual-hinge technology, and built-in large models, which will be officially sold before the end of the year. At present, all signs indicate that Huawei's triple-folding screen phone is coming soon.

In early August, Yu Chengdong was photographed using a triple-folding screen phone on an airplane. From the exposed pictures, in addition to the larger screen display after unfolding, there is also a stylus designed on the right side of the phone, attracting more attention from netizens. Subsequently, this triple-folding screen phone was exposed in another occasion, and it can be seen that although it is triple-folded, the thickness in the folded state is not very thick in terms of perception, at least not the "brick" style that everyone imagined before.Market news indicates that Huawei's triple-folding screen smartphone is expected to be released as early as September, directly targeting Apple's iPhone 16 series. The estimated price range is between 15,000 and 20,000 yuan, but due to factors such as production yield rates in the early stages, the initial stock may not be very abundant.

"Definitely a shortage in the early stage, and we are all prepared for it," a long-term reseller of Huawei smartphones, known colloquially as a "scalper," said to the Tai Media APP. "Huawei doesn't have a premium space for every model, but the profit from large folding screens is considerable, especially since this is the first triple-fold model. Conservatively, there could be a fluctuating profit of around ten thousand yuan in the first wave, and even afterwards, it should be in the thousands."

In addition to the excitement of the scalpers, after the exposure of Huawei's triple-folding screen, related concept stocks also showed unusual movements. Among them, the stock prices of KaiSheng Technology and YiAn Technology hit the daily limit on the day of the product's exposure, and the stock prices of several other companies in the industry chain also rose. Previously, KaiSheng Technology had revealed that it has been co-developing UTG (Ultra-Thin Glass) technology with Huawei, with a small batch of orders shipped for use in related terminal phones. The company's UTG has been introduced into the resource pools of downstream panel manufacturers and terminal manufacturers, achieving mass production and delivery.

As for the news circulating online about Huawei's triple-folding screen, KaiSheng Technology stated at the time that they were confirming the authenticity of the photos and the actual situation. Due to confidentiality agreements with customers, it is not convenient to disclose related information.

Why be so aggressive?

Since its full return last year, Huawei's smartphones have been soaring in the market, leveraging the Mate 60 series and the Nova volume series to sound the horn for a rapid counterattack. According to the latest data released, Huawei ranks fourth in domestic shipments and third in sales in the second quarter, only 0.1 percentage points behind Apple in second place. Many analysts have pointed out to the Tai Media APP that with the performance of the Mate 70 series and subsequent Nova models, Huawei will soon return to the top position in the domestic market.

Looking at the current pace, Huawei is walking steadily, especially in the high-end market, where it is far ahead of other domestic brands. Generally, the pace after returning is mainly to seek stability, and aggressive actions will to some extent increase market volume, but the potential risks will also be greater. At present, in the folding screen market, Huawei also needs to continue to lead. This time, the market has also shown a variety of voices in the face of the bold launch of the triple-folding screen.

Previously, regarding the triple-folding phone, Honor CEO Zhao Ming pointed out, "Honor has completed the technical level of the triple-folding screen, and the subsequent commercialization time node needs to be determined according to consumer demand. For us, the triple-fold is not a technical issue, but a matter of business choice."

As mentioned earlier, everyone has concept machines, and as for when to marketize, everyone is waiting for an opportunity. An analyst from a certain institution told the Tai Media APP that Huawei's technology is indeed leading, but considering the market, the audience for the triple-folding screen is still too small.

In the view of the Tai Media APP, Huawei's seemingly aggressive behavior this time is actually an expected layout. On the one hand, the folding screen is in a momentum of rapid growth. Looking back at the past two years, the entire smartphone market was in a continuous decline, while the folding screen was growing rapidly against the trend.Since the release of the first mass-produced folding screen over five years ago, the players in the folding screen market have expanded from Samsung and Huawei to now include Xiaomi, OPPO, vivo, Honor, and others. Sales have been growing at a double-digit rate, becoming a "clear stream" in the declining overall smartphone market. In terms of volume, compared to the global smartphone market's shipment of over 1 billion units, the folding screen market of tens of millions is not significant. However, considering the price and target audience, folding screens are gradually taking a dominant position in the high-end market.

Canalys analysts pointed out to the Titanium Media App that, looking at the performance in 2023, the penetration of folding screens in the high-end market continues. At the same time, a consumer survey by Counterpoint Research also showed that in China, among users who have previously purchased smartphones priced above $400, as many as 64% are considering folding screen phones for their next purchase plan. Among them, 20% have explicitly stated that they will buy a folding phone, 44% are weighing both flat and folding phones, and most users are willing to pay between 7,000 and 8,000 yuan for large folding devices.

According to Counterpoint Research's weekly data tracking service, in the first quarter of 2024, the shipment of folding screen phones increased by 48% year-on-year, with the shipment of large folding models increasing by 91% year-on-year, while the shipment of vertical small folding models decreased by 1% year-on-year. Due to the richer usage scenarios of large folding models, consumers have begun to favor this form, leading to a significant increase in shipments.

After significant improvements in thinness and performance, the tri-fold not only brings two forms of phones and tablets but also a form similar to a PC, which is more convenient for business people to handle work and entertainment. The large screen after unfolding also brings better multitasking capabilities, allowing users to run multiple applications and switch efficiently. There have been voices suggesting that the tri-fold ratio is the reasonable visual ratio for folding phones, which can differentiate from flat phones. If Huawei's tri-fold screen phone is really released this year, it is also a show of strength to competitors, further declaring its advantage in the folding screen field.

On the other hand, in conjunction with the official commercialization of the native HarmonyOS in the fourth quarter, Titanium Media APP believes that Huawei's release of the tri-fold screen at this time, in addition to competing with Apple in the high-end market and declaring its position, is also a preaching of the native HarmonyOS. As we all know, although it has been five years in development, the software experience of folding screens is still hard to compare with flat phones, and bugs occasionally appear when switching screens. For tri-fold screens, software adaptation to mobile phones, tablets, and even PC interfaces is required, and different display ratios also pose higher requirements for the brand.

In contrast, the native HarmonyOS has a characteristic of adapting to screens of different sizes, with the feature of one-time development and multi-terminal deployment, which can better connect phones, tablets, and PCs, such as automatically recognizing screen size and bending angles to achieve a reasonable layout of the page. Previously, there were also bloggers revealing online that the native HarmonyOS will have many innovations for folding screen phones, which are expected to greatly improve the user experience of folding screen devices.

Mastering the definition rights, the domestic supply chain is accelerating to catch up.

The exposure of Huawei's tri-fold screen and the upcoming release are not only of great market significance for Huawei itself but also a great encouragement and recognition for the entire Chinese industry chain. From the terminal market, among the top global brands, all are Chinese brands except Samsung.

Counterpoint Research also pointed out that the highest increase of 49% in the folding screen phone market in the first quarter of this year is mainly due to the significant increase in shipments of several Chinese mobile phone brand manufacturers, with Huawei topping the list for the first time, surpassing Samsung. In the segmented market, in addition to China, the folding screen market in the United States is also led by Chinese brands. Data shows that in the US folding phone market, Lenovo Motorola accounts for as much as 65% of the market share.

Canalys estimates that the shipment of folding screen phones in 2024 will increase by 18% year-on-year to 20.6 million units. From 2024 to 2028, the shipment of this category will grow at a compound annual growth rate of 26.8%, reaching 53 million units. For Chinese brands, using folding screens to break through the high-end market is a very good opportunity, and what needs to be done now is to improve the folding screen ecosystem.It is worth mentioning that the leading position of terminals is also due to the completeness of the entire industry chain. Currently, the price of folding screens is decreasing, and the experience is becoming more refined. In addition to the scale factor, more importantly, the continuous maturation of the upstream supply chain and the improvement of the yield rate, especially the rise of the domestic supply chain, is driving the overall cost of folding screens to decrease continuously. A supply chain analyst revealed that small folding screens are hundreds of yuan more expensive in cost than direct screens. Compared with direct screens, folding screens require improvements in materials, film materials, structure, and stress control.

Ti Media APP learned that in addition to the higher requirements for screen components, folding screens have added technologies such as foldable cover plates and hinges, which have also significantly increased the cost. A technical staff member from BOE (Jingdong Fang) told Ti Media App that the technical challenges of folding screen phones lie in overcoming the high-frequency bending times of the screen and the life of the hinge, as well as issues such as the thickness of the screen mounted on the whole machine, battery endurance, and software compatibility.

Compared with up-and-down folding and left-and-right folding, triple folding poses higher requirements for the thinness of devices, screens, hinges, heat dissipation, signals, and howling, among others. CINNO Research stated that triple-folding machines indeed face many challenges in the technical aspects of screens, hinges, and other high-difficulty components, but with the continuous progress of material science, engineering technology, and production processes, these challenges are gradually being overcome.

According to public information, domestic screen manufacturers such as China Star Optoelectronics Technology (CSOT), BOE, and Visionox have all demonstrated the concept products of triple-folding screens. At the same time, more brands are using domestic screens from BOE, Visionox, and Tianma, and the display effects are also approaching those of Samsung. According to CINNO Research statistics, the global market shipment of AMOLED smartphone panels in the first half of 2024 was about 420 million pieces, a year-on-year increase of 50.1%. Among them, the share of the Korean region accounted for 49.3%, falling below 50%; domestic manufacturers' shipment share accounted for 50.7%, an increase of 10.1 percentage points year-on-year, surpassing 50%.

The second-quarter report on the folding screen phone panel market released by DSCC shows that the second quarter set a new high for shipments, with a sequential increase of 151% and a year-on-year increase of 126%, with a total shipment of 9.8 million pieces. With the further improvement of domestic brands in terminal sales, the proportion of upstream screens will also be higher.

In addition to screens, the localization of hinges, cover plates, and other components is also increasing. At present, UTG has gradually replaced CPI to become the mainstream of the folding screen market. According to TrendForce statistics, the market penetration rate of UTG in 2023 has exceeded 90%, with a value of 360 million US dollars, and it is expected to break through 600 million US dollars in 2024.

CINNO Research data shows that the area proportion of folding screen phones using the UTG scheme has approached 41%, an increase of 10 percentage points year-on-year. CICC has pointed out that domestic manufacturers' UTG production capacity is accelerating expansion, and it is moving from secondary thinning processing to primary molding layout. In the future, with the gradual realization of localization, cost reduction, and the further increase in UTG penetration rate, it is foreseeable that folding screens will remain the key for mobile phone manufacturers to break through in the high-end market. Once the triple-folding screen is verified by the market, it will open up a larger incremental space, and the same is true for the upstream supply chain.

However, it is also necessary to recognize that the track is never short of competitors, especially in crowded tracks. While the Chinese supply chain is accelerating to catch up, it is also important to recognize the gap. This round of opportunities for folding screens may, like new energy vehicles, allow domestic products to achieve a reversal and lead in terminals and the entire industry chain, becoming the leaders and definers of the category.