Europe’s smartphone sales have returned to growth after a few years of decline. There are three main reasons for this: (1) 2023 was really bad, so we can expect things will not be as bad in 2024; (2) Macroeconomic conditions are improving across the region, resulting in a boost for consumer finances; (3) Many consumers are finally upgrading their devices after holding on to their old ones for longer than they normally would.
For many consumers, the choice to finally upgrade is down to a surge of innovation in the smartphone market. In recent years, the perception held by many was that smartphones were all the same, and that “new” smartphones were only iterative upgrades over the previous generation. Why get the latest smartphone when one can keep an older version that is pretty much the same, or even buy an older version for much less?
But that era is now over, and we are seeing a return of cutting-edge smartphone innovation to the market. Spearheading this revolution are foldable smartphones, particularly in the book-type form factor, which for many OEMs is the flagship device and a way to demonstrate their technical expertise. Foldables are one of the few segments in the European smartphone market showing significant growth. Further, the combination of super-advanced hardware and new AI capabilities is starting to make a real impact on the way people use their devices, which is bringing excitement back to the market.
Competition driving foldables segment forward
Foldable smartphones have been around for a while. Samsung launched Europe’s first foldable smartphone – Galaxy Fold – in Q3 2019 and has largely dominated the segment since. However, its sales remained limited as prices were high and consumers were unconvinced of the durability and longevity of the devices. However, things began to change in the second half of 2023 when a number of other OEMs launched foldable devices, including OPPO, OnePlus, Google and, most significantly, HONOR.
This increased competition is vital in driving the foldables segment forward. Without competition, innovation remains limited, as demonstrated by the small differences between the Galaxy Z Fold6 and Fold5 (and arguably even the Fold4 and Fold3). But others have now come in with impressive devices. More devices from more players means more competition, which leads to increased innovation and ultimately lower prices. A win-win for consumers, and a path to mass adoption of foldable smartphones.
We are already seeing evidence of this. By the end of 2023, foldables share of total European smartphone sales rose to 2% (with the highest ever share of 2.5% in Q3 2023), and sales have continued to grow. In H1 2024, foldable sales grew 52% compared to H1 2023.
Within the foldables segment, the book-type form factor is driving the growth. Clamshell-type devices have been, up until now, the main volume driver for foldables, largely because they are cheaper. But that is changing. While sales of clamshell-type foldables grew by 19% YoY in H1 2024, sales of book-type foldables increased by 133% in the same period. This resulted in the sales ratio of clamshell-type to book-type foldables in the European market shifting significantly from around 70:30 in the first half of 2023 to around 55:45 in the first half of 2024.
Source: Counterpoint ResearchMarket acceptance of foldable smartphones is growing. According to Counterpoint Research’s Global Foldables Survey, book-type smartphone owners most like the larger displays and multi-tasking capability of the devices. They are also pleasantly surprised by the book-type foldables’ better-than-expected durability. The top dislikes, though, are the weight of the devices and their thickness when folded. But that is where HONOR comes in.
HONOR challenges leadership of Europe foldables market
As mentioned, one of the key reasons for the foldable sales growth is the increased competition. In the book-type segment, OnePlus and Google have made an impact thanks to some good devices in Europe (the Open and Pixel Fold respectively). But the most remarkable progress has been made by HONOR, which entered Europe’s foldables market with the Magic Vs in early 2023. By the end of the year, HONOR was second behind Samsung in terms of book-type foldable sales. Then came the HONOR Magic V2, which changed the game.
Counterpoint analysts were invited to a preview of the Magic V2 in the summer of 2023, and we were amazed at how thin it was. At just 9.9 mm thick when folded and 4.7 mm when unfolded, the Magic V2 made Samsung’s best effort at the time – Galaxy Z Fold5 – look and feel huge (13.4 mm when folded and 6.1 mm when unfolded). In fact, even when folded, the Magic V2 isn’t much thicker than a standard candy bar smartphone. Despite the thinness, HONOR has managed to cram in an impressive 5000 mAh battery (split into two credit-card size cells) with 66W charging, a big step up from the Fold5’s 4400 mAh and 25W effort. HONOR also hasn’t compromised too much on the camera either, packing in a 50MP wide, 50MP ultrawide and 20MP telephoto with 2.5x optical zoom, compared to the Fold5’s 50MP wide, 12MP ultrawide and 10MP telephoto with 3x optical zoom.
All in all, HONOR has somehow managed to create a foldable smartphone that feels and functions like a regular smartphone, but with the added bonus of a larger inner display. HONOR has demonstrated significant technological achievements in thickness, weight and battery, some of the most important aspects of foldable smartphone products.
And the outcome is astonishing. HONOR’s book-type foldable sales in Europe increased 22-fold between H1 2023 and H1 2024. At the same time, HONOR contributed the most to the growth of the overall book-type segment – book-type foldable sales more than doubled between H1 2023 and H1 2024, with HONOR accounting for 70% of this increase.
Source: Counterpoint ResearchOf course, seasonality plays a big role in the European foldables market. Samsung typically releases its latest foldables in July while HONOR does so earlier in the year. And, even though the Fold6 is, arguably, not the best book-type foldable anymore, we expect it to grow in Q3 and Q4 of this year due to Samsung’s reach, availability, brand awareness and leadership in the overall smartphone market in Europe. The battle for leadership of the European foldables market is very much on.
HONOR bringing even more magic to foldables with V3
HONOR seemingly caught Samsung off-guard with the Magic V2, and Samsung is trying hard to catch up. But the Samsung Galaxy Z Fold6, launched in July 2024 (almost a full year after the HONOR Magic V2), doesn’t make much progress – it is still significantly thicker and heavier than the Magic V2 and features the same cameras and battery as the Fold5.
Meanwhile, HONOR seems to have done the impossible, somehow shaving even more off the thickness in the upcoming Magic V3 while also upgrading the camera and battery. Further, HONOR’s device-side AI empowers hardware, enables fluent user interaction via an intent-based UI, and contributes to a cross-device AI ecosystem. This is in addition to AI-based applications such as Magic Portal, auto notes, defocus eye protection, anti-fraud measures and face-to-face translation.
Although Samsung didn’t make any significant changes to the Fold6 hardware, it has put a lot of effort into its AI capabilities, and this will be the next big smartphone innovation battleground. Samsung has captured the attention of consumers with its Galaxy AI offering, which is adding to the appeal of an otherwise unremarkable device. With the Magic V3, HONOR has the opportunity to show that its seamless fusion of platform-level AI and market-leading hardware can be a winning combination.
*This Blog was sponsored by HONOR
