vivo Expands Foldables to Crack Premium Market

Vivo Continues to Invest in Foldable Screens Amid Competition for the Premium Market

Reported by Lu Xiao from Beijing for

This spring, Android smartphone manufacturers are doubling down on their investments in foldable screen technology.

Following earlier moves by Xiaomi and Huawei, on March 26th, Vivo officially launched its new generation of large foldable smartphones, the Vivo X Fold3 series. “The Vivo X Fold3 series represents a maturity in foldable screen technology and user experience, marking the beginning of foldable devices entering the mainstream market,” said Vivo Vice President of Products, Huang Tao, at the launch event.

The push for foldable phones into the mainstream can be attributed to breakthroughs in core components like panels, hinges, and batteries, as well as ongoing cost reductions. However, as consumers lengthen their device replacement cycles, it remains to be seen how much incremental market growth can be triggered by foldable phones and their AI capabilities.

Doubling Down on Foldable Screens

Foldable phones are no longer a novelty, with thinness becoming a critical battleground for manufacturers.

According to Huaxia Times, the Vivo X Fold3 series incorporates the third-generation Snapdragon 8 SPU flagship chip, a 6nm in-house V3 imaging chip, and Samsung’s E7 screen, all packed into a device with a minimum weight of just 219 grams.

Continuous technological advancements in batteries, hinges, and panels are the main reasons behind the increasing lightness of foldable phones.

For example, besides showcasing a super-durable carbon fiber hinge, Vivo announced a semi-solid-state battery technology on March 26th, aimed at solving the endurance issues of phone batteries in extremely cold temperatures. This technology reportedly allows for continuous power supply to the phone at about -20°C, while offering higher energy density, larger capacity, slimmer profile, and faster charging, thanks to second-generation silicon material. Vivo has also established a collaboration with Ningde New Energy to build a “Blue Ocean Endurance Lab,” exploring future battery technologies in material science, electrochemistry, battery health, and charging management.

As technology advances, making devices cheaper, the increasingly affordable pricing of foldable phones is another factor driving their popularity. For example, the starting price for the X Fold3 is 6,999 Yuan, with the X Fold3 Pro starting at 9,999 Yuan, compared to the previous generation X Fold 2’s launch price of 8,999 Yuan. On March 27th, Huaxia Times reported seeing smaller foldable phones priced around 3,000 Yuan on online platforms.

It’s important to note that the competition extends beyond hardware like foldable screens to include AI capabilities.

Recently, Meizu and OPPO have unveiled their AI strategies, and the Xiaomi 14 series phones have incorporated their own large on-device AI models. The Vivo X Fold3 Pro features an AI-based “Blue Heart” model, accomplishing a “7B+ parameters on-device and 70B parameters on-cloud” scale deployment. As the first phone manufacturer to push for on-device applications of large AI models, Vivo’s development can perform over 700 phone-related functions, serving more than 20 million users with AI-powered answers, content creation, search, management, and interaction services.

Competing in the Premium Market

Whether it’s enhancing foldable screens or AI capabilities, Android smartphone manufacturers are collectively striving to capture the high-end market. Foldable phones are seen as a key segment within this category, especially as the overall smartphone market contracts.

According to IDC, the fourth quarter of 2023 saw approximately 2.77 million foldable phone shipments in China, nearly a 150% year-over-year increase. Over the entire year, foldable phone shipments reached about 7.07 million units, a 114.5% increase from the previous year.

In contrast, while China’s smartphone market rebounded in Q4 after ten consecutive quarters of decline, with a modest 1.2% year-over-year increase to 73.63 million units, the total annual shipments dropped 5% to approximately 271 million units, marking the lowest in nearly a decade.

Despite the declining overall market, premium phones, especially those with foldable screens, are holding their value and resisting price drops better. A report by Counterpoint Research pointed out that although global smartphone shipments fell by 5% to 1.2 billion units last year, hitting a decade low, sales in the global premium smartphone market (wholesale price ≥ $600) were projected to grow by 6% year-over-year.

Even within the foldable phone category, larger models are gaining market share over their smaller counterparts. IDC data also highlighted that in 2023, foldable products in China’s market regained their share to 68.1%, a 10.4 percentage point increase from the previous year.

However, despite the rapid growth of foldable phones, their market penetration remains low, particularly outside of China.

TrendForce estimates that global foldable phone shipments will reach about 18.3 million units in 2023, a 43% year-on-year increase but only accounting for about 1.6% of the market. The firm anticipates a 38% growth to about 25.2 million units in 2024, slightly increasing the market share to 2.2%. Looking at the mid to long term, TrendForce predicts that the foldable phone market will continue to expand, potentially reaching 70 million units by 2027, accounting for about 5% of the smartphone market.

IDC China’s senior analyst Guo Tianxiang also shared with Huaxia Times that he expects the domestic phone market to rebound by about 2% to 3% this year, dependent on the recovery of consumer spending power and the ability to stimulate upgrade demand among consumers in smaller cities and towns. He noted that while foldable phones are expected to continue their rapid growth, they are starting from a low base and are unlikely to drive significant market expansion.

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