Honor (pvt) is an unusual smartphone brand in that it is state-owned, having been sold to the Shenzhen government (98.6%) and a group of Honor’s former distributors and partners (1.4%) by its former parent, Huawei (pvt), in order to shield the company, formerly Huawei’s mid-range smartphone line, from US trade sanctions that have severely limited Huawei’s ability to compete in the smartphone market.  In making the split, which raised ~$15b for Huawei, Honor no longer had access to Huawei’s vast IP, huge R&D budget, or Huawei’s marketing, but at the same time is no longer burdened by the US trade restrictions that have cost Huawei much of its smartphone business.
The ~7,000 employees became responsible for their own product development and marketing in November 2020 and was able to release its first purely ‘Honor’ smartphone in early 2021 and has climbed to a ~4.8% share of the global smartphone market heading into 4Q 2021.  More to the point Honor has just released its first foldable smartphone, with a delivery date of January 18, which puts it in with the likes of Samsung, Huawei, Oppo (pvt), Xiaomi (1810.HK), and Motorola (MSI), all of whom have foldables which range in price from ~$925 to almost $2,200.  While the Honor Magic V does not have an official price, it is expected to sell for between $1,500 and $1,600, putting it in roughly the same price category as the Samsung Z Fold 3.
All in, there is nothing outstandingly different about the Honor Magic V relative to other foldables, but as a first entry for a relatively new company, without the resources of Huawei, it’s a good start.  While Honor does have a good following in China, they still face intense competition from other Chinese and outside brands, so their success in the foldables realm is not assured.  That said, they do have the Shanghai government as their primary funding source, which gives the local government a large vested interest in Honor’s success, which certainly will not hurt when it comes to allocating resources, particularly financial ones. 

Earlier this month we noted that China’s Vivo (pvt), a well-known smartphone brand that is owned by BBK Electronics (pvt), the same Chinese company that owns Oppo (pvt), OnePlus (pvt), RealMe (pvt), and iQQQ (pvt) brands that represented 46.4% of the Chinese smartphone market in 3Q and 28.6% of the global smartphone market, was granted a patent entitled “Terminal Device” by the USPO.  What made this patent a bit unusual is that it is not a device that folds like current foldable smartphones, but one that is a tri-folding device that can be used as a single screen device when closed and as an ultra-wide device when completely unfolded.
In typical use, most likely gaming, the screen is open to its full (3X) extent, which is ideal for game play or movie viewing but does not leave room for game or video controls, however embedded in the device are two projectors placed on either side of the open display, that project a keyboard or control space on the desk or table in front of the device.  Since there are two projections of the same keyboard image, the placement of a finger or similar object on the virtual keyboard will cause sensors to detect that the projected image has been interrupted and will plot the location of that interruption.  By calculating where on the virtual keyboard the projected image has been interrupted, the corresponding key or control movement can be determined and the system recognizes the users input.  

That said, Samsung Electronics, the current leader in the foldables market, has been awarded a new patent by WIPO that shows a tri-foldable smartphone similar to a prototype that the company showed in May and August, although this new patent shows that the three cameras have been moved to the back of the device, along with a sub-display.  However when the device is folded the first of the three screens becomes the main screen and lessens the need for a large back screen and an under-screen camera is also available for use when the device is open, along with a fingerprint scanner and supporting hardware and software for the S-pen, along with connections for an external keyboard, mouse or microphone.  Typical USB-C connection is offered but HDMI is also available along with an audio connector and an SD card slot, so the device can be used as a projector or large display source through the HDMI connection.  Samsung also states that as with all tri-fold devices, the quality of the antenna signal is compromised as the distance between components increases (no data but seems logical) so they have added a second antenna set in the third ‘fold’, along with one in the first.
As we have stated previously, the filing of a patent does not indicate that a company will actually produce a similar device, but it is known that Samsung has been working on a rollable smartphone that would expand to twice its normal size, so the idea of a tri-fold is just a logical expansion of that concept.  More likely a 2023 product, if it ever makes it off of the drawing board, but waiting too long will give Vivo, and Oppo sub-brand OnePlus more time to refine their patent related prototypes.  As the foldable leader, Samsung must push the envelope as quickly as possible without shooting itself in the foot with a device that is less than functional or has physical flaws.  You’ve got to be in it to win it.

​As mentioned yesterday, Chinese brand Oppo (pvt) released it first foldable smartphone last night, the Find N.  As noted the phone looks similar to the Samsung Z Fold, although a bit smaller when opened at 7.1” vs. the Galaxy Fold 3’s 7.6” main display and a 5.5” cover display vs. the Galaxy Fold 3’s 6.2” display.  The Oppo phone has 3 main cameras (50MP, 13 MP, and 16 MP) and two selfie cameras (both 32 MP), while the Galaxy Fold 3 has the same number but with lower pixel counts (12 MP, 12 MP, and 12 MP for main and 4MP and 10 MP for selfie).  Other than those differences the two devices are quite similar, and while an official price has not been revealed for the Find N, it is expected to be ~$1,200.  The Galaxy Fold 3 5G with no trade-in (unlocked) is $1,650.  At least for now, the phone will only be sold in China with deliveries before the end of the year.

Earlier this month Chinese smartphone brand Oppo (pvt) teased with a few words introducing Oppo’s first flagship foldable smartphone, the Find N, which was in development for 4 years and has morphed through 6 generations.  The phone is expected to be released tonight (Wednesday) in China as part of Oppo’s annual Inno Day.  While the picture (Fig 4) shows little, much of the speculation is that the new foldable will look similar to the Samsung (005930.KS) Z Fold, with Korean media indicating that Samsung Display (pvt) is the producer of the 7.1” folding display, while BOE (200725.CH) is the producer of the 5.45” external display. 
As SDC uses UTG (Ultra-thin glass) rather than polyimide films as a cover for the foldable display, the Find N is the first Chinese foldable to employ UTG, with previous foldables from Huawei (pvt) and Xiaomi (1810.HK) using polyimide.  The Oppo foldable is also the first Chinese company to use an LTPO (Low-temperature poly-silicon) backplane, again a characteristic of SDC’s most recent foldables.  While Chinese panel producers have supplied folding displays to Xiaomi for its previous foldable, it is expected that the upcoming Xiaomi Mi Mix Fold 2 will use an 8” SDC folding display (with UTG) and a Chinastar (pvt) 6.5” external display , while both foldable and external displays were supplied by Chinastar on the previous model.  Vivo (pvt), sister company to Oppo, is also expected to use the SDC foldable and a BOE external display for its foldable in 2022. 
Huawei was thought to also have been considering using SDC’s foldables for its upcoming upgrade to its Mate X2 foldable but seems to have decided to remain with foldable supplier BOE, along with Honor (pvt), a former Huawei brand, who is also expected to use BOE for its foldable next year.  Samsung Display is the share leader (3Q) in the flexible OLED market, with a 62.2% share by our calculations, but does face competition from BOE and LG Display (LPL), although combined they still have only a 28.9% share, but when it comes to foldables, SDC is definitely the leader with a share over 90% this year. 
Samsung’s push to spread foldables into the laptop segment has given them a new market, also one that they dominate, and while the unit volumes for foldable notebooks are still relatively small, the surface area is considerable large than for smartphones..  With parent Samsung Electronics’ foldable volume expected to double in 2022 from 7m to 14m units, and the overall market for foldable expected to double from 9m to between 18m and 19.5m units, we expect SDC to maintain a substantial lead over competitors in the foldable space despite the competition from BOE.  It might be a bit more difficult to maintain such a high share in 2023, as Chinese foldable producers sharpen their production skills, but SDC has been one step ahead since day one and will likely remain so in 2023 and beyond.
 

Estimates for OLED notebook production this year are for between 5.3m and 5.6m units, up from less than 1m last year, growing to ~7.5m in 2022 and 15m in 2023, representing not only explosive unit volume growth but significant demand growth on an m2 basis, one of the reasons behind OLED capacity expansion projects in China.  SDC will likely see it overall share of the flexible OLED market decline on a unit basis, but will likely see its actual share of OLED panels for notebooks on an m2 basis increase in 2022, as it has established relationships with almost all of the notebook brands that offer OLED displays, especially its parent, who is expected to have a 20% share of the OLED notebook market itself this year, second only to Asus (2357.TT).
​

Samsung is big on foldables and has taken that to include rollables, meaning those devices where the screen can be coiled inside of the device.  Taking it to another level, Samsung has filed a patent for another rollable device; this time a watch.  With typical watch displays ranging from ~1.4” to 1.9”, Samsung seems to feel that the user might need more room to see what time it is and has developed (IP) the mechanism for a rollable watch display that can increase in size just by pulling the top part of the watch frame.  The increase in size was not specified but from the drawings it would seem to have double the area.
But Samsung did not stop with just a rollable display, but also includes S-Pen capabilities and the ability to turn the display from vertical orientation to horizontal without removing it from your wrist and being a ‘smart’ device, the watch itself can adjust it size according to the user’s content.  So if you want to see the time, the display would stay normal size, but when reviewing an e-mail or text, the display would elongate to show more of the message or allow for larger type.  When extended, the user will be able to use the under-display camera, allowing the watch to be used for taking pictures (“Bond, James Bond”) and of course, there will be no need to pair the device with a smartphone as it will operate as a standalone cellular device.
While Samsung is pushing the limits of current technology with such a device, they are not the first to patent such an idea as China’s Oppo (pvt) received a patent for a foldable watch all the way back in 2019, although it was a very different display set-up.  Given the complexity of such a device (the patent is 113 pages), we expect it might be some time before Samsung makes such a watch available to consumers however the patent drawings were quite specific on how the mechanical components might work, likely more to keep others from duplicating the idea than Samsung having proved out the mechanics on a scalable basis.  Interesting idea though.

Before we go into detail, we want to reinforce the concept that the filing of a patent application and the subsequent granting of same patent have no bearing on whether the device or concept shown in the patent will ever be produced commercially.  In many cases such patents, they are filed to make sure that others do not commercialize the concept without acknowledging (paying) the applicant or the assignee, who did not originally intend to commercialize the idea.  That said, many companies have filed patents for foldable mobile devices.  There are 1,184 applications or granted patents in the US Patent Office database (1976 to date) under the heading “Foldable Electronic Device” and 783 in the WIPO (World Intellectual Property Organization) database, so there is no shortage of basic foldable device applications and patents, and literally thousands more that are more specific as to displays, hinges, software, and system processes, rather than the whole device, so when we notice something unusual, we try to bring it to the attention of our client base.
Last month Chinese smartphone brand Vivo (pvt), a well-known smartphone brand that is owned by BBK Electronics (pvt), the same Chinese company that owns Oppo (pvt), OnePlus (pvt), RealMe (pvt), and iQQQ (pvt) brands that represented 46.4% of the Chinese smartphone market in 3Q and 28.6% of the global smartphone market, was granted a patent entitled “Terminal Device” by the USPO.  What makes this patent a bit unusual is that it is not a device that folds like current foldable smartphones, but one that is a tri-folding device that can be used as a single screen device when closed and as an ultra-wide device when completely unfolded.  The specifics as to whether the display portion of the device is a foldable single screen or three separate displays is not specified, but the mechanism for folding and unfolding the segments, and the mechanics of how they are locked in place when open is quite specific, but the patent goes further.
In typical use, most likely gaming, the screen is open to its full (3X) extent, which is ideal for game play or movie viewing but does not leave room for game or video controls, however embedded in the device are two projectors placed on either side of the open display, that project a keyboard or control space on the desk or table in front of the device.  Since there are two projections of the same keyboard image, the placement of a finger or similar object on the virtual keyboard will cause sensors to detect that the projected image has been interrupted and will plot the location of that interruption.  By calculating where on the virtual keyboard the projected image has been interrupted, the corresponding key or control movement can be determined and the system recognizes the users input. 
How practical such a system is, not the folding device itself, although it is a mechanically complex device, but the ‘virtual keyboard’ and its accuracy and responsiveness, would need to be examined further as the type of surface and lighting characteristics could play into its operation, but you have to give Vivo credit for coming up with an ultra-wide display that dos not force the user to cover part of the image to work controls.  Again, the odds are that Vivo will never produce such a device, but it is an interesting concept that would now be covered by the recent patent.  It can’t hurt.

​Huawe (pvt), whose smartphone business has been devastated by US trade sanctions, is still hoping to regain some ground in the global smartphone market and to that end is preparing to release their next foldable iteration, with a design similar to Samsung’s Z Flip line.  The new foldable, tentatively named the Mate V, would be the fourth foldable for the company after the Mate X (11/2019), the Mate Xs (3/2020) and the Mate X2 (2/2021), none of which have been ultimately successful.  As new leaks and renders are beginning to appear, it seems that Huawei has moved from the full-sized foldable to the pocket-size foldable that Samsung and Motorola (MSI) have championed.
A number of questions remain about the Huawei device however, and while some are excited about the new hinge system that Huawei has developed, we wonder how the company will attempt to convince those outside of China that such a phone can compete with Samsung’s Z-Flip, which runs a Qualcomm (QCOM) Snapdragon 888 5G Chipset produced on a 5nm node and runs on Android 11, while the Huawei phone is still expected to have no Google GOOG) Play services that limits its ability to be sold outside of China.  We also wonder what processor will be used in the Mate V, as Huawei has limited or no access to 5nm nodes, and while this might be an issue for gamers, who demand the highest performing CPU, it will be more of a marketing issue for Huawei, having to convince buyers that the device can perform as well as those produced at 5nm.
There is also a question as to the size of the secondary screen, which is still in question.  As this style foldable is a small device when closed, the secondary screen is more a message display than one that will be used for movies or other media.  The Samsung Z Flip 3 has a 1.9” secondary screen, so the Huawei device should have something close to that size, but questions remain as to whether it will have any secondary screen or a 1.35” display that Huawei has specified in patents.  As Samsung is selling the Z Flip 3 for $899 (128GB) and throwing in a pair of Galaxy Buds2 ($149 list), Huawei will need to be competitive just to stay in the ball game.  Hopefully they have been able to cut hinge costs and get a local OLED panel supplier to give them a good price for the foldable display, but it is going to be an uphill battle unless they have some featured ‘surprise’ built into the device.  We will have to wait until January (CES) or February (Mobile World Congress) to get full details, but we are keeping expectations low, especially with the Google Pixel Fold, the company’s first foldable, also expected around the same time.

It is still early in the foldable smartphone cycle, even with the August 11 release of Samsung’s (005930.KS) 3rd foldable series iteration, the Galaxy Z Fold 3 and the Galaxy Z Flip 3.  With shipments beginning in South Korea on August 24 and in a number of other countries by the 2nd week in September, there are a few data points coming in as to how the devices are selling.  These are anecdotal at best and in some cases represent what dealers ‘expect’ rather than what has already been delivered, but it seems the units are selling reasonably well thus far.
Given that South Korea, Samsung’s home court, dealers were able to start accepting orders early, and thus far ~1m units have been sold in Korea, which is more than the very popular Galaxy Note 10 (8/23/19) and the Galaxy S8 (4/21/17) sold in an equivalent period, with 270,000 activations on the first day of sales.  JD.COM (JD) was said to have a total of 700,000 waitlisted orders at the end of August, while TMall (BABA) was said to have 168,000 in the queue at the same time.
More surprising is that India seems to have also fallen for the new foldables, with 1st day orders said to be 2.7 times that of the Note 20 (Announced 8/5/20) and is expected to exceed the Note 20 in overall sales, although we note that sales of the Note series had been declining for the last few years.  More surprising was the statement that 60% of the sales of the two foldables in India were for the more expensive Galaxy Z Fold and that 25% of those phones turned in for Fold price rebates were iPhones.
In China, where Samsung’s smartphone share has dwindled to ~1% over the last few years, the new Fold series sold 35,000 units and for the first time in many years, said phones made it into the top 10 in China for the month of September.   While some are touting that increased interest as a way for Samsung to find its way back into the Chinese market, with domestic brands representing 93.8% of total shipments in China, its going to take a lot of foldables to gain significant unit share for Samsung, although from a sales value standpoint things might be better, as the average smartphone price in China is a bit over $400, while the price of the Z Flip 3 and Z Fold 3 is ~$1,150 and $2,350 respectively.
Expectations for the Flip 3 and Fold 3 are for ~7m units sold this year and while the phone has barely been rolled out globally, expectations are already rising as such narratives about orders and sales appear.   Samsung is said to have begun to expand production at its assembly plant in Bac Ninh, Vietnam, one of three in that country, in order to alleviate potential delivery issues.  While we are encouraged by such patter, it would seem to be a bit early in the Flip/Fold 3 cycle to be making suppositions about 2021 shipments as we head into the holiday season. 

Samsung Electronics (005930.KS) finally released its latest iteration of foldable smartphones, the Galaxy Z Fold 3 and the Galaxy Z Flip 3.  Given that there has been an endless number of ‘leaks’ associated with these two devices, there is little to say that hasn’t been said, so as Sgt. Joe Friday used to say “Just the facts, ma’am”

​OK so you forgot to come up with a gift for your 6 year old while you were at the conference in Tokyo, but did you really buy that $400 Inflatable Water Park with Slide and Water Gun out of the SkyMall (pvt) catalog while you were dozing off in the middle of the Pacific?  Since its sitting at your front door, it looks like you did, but you can make sure the wife knows that you got it at a steep discount from its original price of $600, so it was really quite a bargain and its going to be tons of fun for the kids until it gets punctured and put in a box in the garage to be dealt with next year or until the kids are teenagers and the garage gets converted into a band rehearsal ‘studio’. 
But that is all going to change according to a project involving Royole (pvt), a Chinese display manufacturer who is credited with releasing the first foldable smartphone, the Flex Pai.  In a partnership with Airbus China (AIR.FP) put together in 2018, the companies have been working on replacing the typical airline magazines like SkyMall and those particular to a specific airline (many of which have been terminated as a result of COVID-19), with something a little more sophisticated and potentially practical, an OLED magazine.
The device, which is just entering actual test mode on one plane, is an iPad-like OLED display device that is flexible enough to be called a ‘magazine’ but still able to be used to order food (accepts credit cards), read ‘digital’ magazines and newspapers, stream TV and movies, and even give access to the internet.  Of course, there is hardware that must be installed on the plane and internet access would be governed by the plane’s Wi-Fi capabilities, but the idea is to replace both paper magazines and the back-of-the-seat entertainment systems that are currently on most airline flights.
While the product is not quite ready for release, it helps airlines from having to clean magazines after each flight (really?) and maintaining the oddball seat display systems that are currently available, bringing it down to cleaning just an iPad like device.  We expect there will be a system for checking passengers as they leave the plane in case they ‘accidentally’ place the device in their carry-on luggage, but despite our long-standing criticism of Royole, at least the concept is valid and could one day be an alternative to paper.
The question will be whether it is priced correctly, both to other carriers and to advertisers.  While flyers tend to be a captive audience, ad and content pricing also needs to reflect a reasonable rate that leads to a sale, such as an in-flight movie or similar content, and the system needs to have access to content that does not limit the passenger’s choices to make secondary purchases.  These are not simple tasks, especially while flying at 40,000 feet, but at least the device itself is beginning to take shape.  Airlines themselves will likely be a bit cautious about spending for such new projects after the ravages of COVID-19, but if there is no more alcohol on flights, what else is there to do but read, watch movies, or buy stuff.  Isn’t that what OLED was invented for?