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Xiaomi's entry has brought some waves to the small folding screen market that has been silent for a long time. With the release of its first small folding phone MIX Flip, small folding phones have gathered all the mainstream mobile phone brands except Apple.

Starting with Samsung's Galaxy Z Flip, OPPO, vivo, Honor, and Xiaomi followed suit. The dying Motorola also urgently took advantage of the popularity and joined the battlefield with its classic model RAZR.

The birth of foldable screen mobile phones is due to the long-term sluggish mobile phone market and the ever-lengthening replacement cycle of consumers. Foldable screens that directly change the form of mobile phones are seen as a quick-acting life-saving pill for mobile phone manufacturers. However, compared with the rapid popularity of large foldable phones, small foldable phones have long been in a state of being well-received but not popular.

In February this year, well-known consumer electronics analyst Ming-Chi Kuo said in a report that most mobile phone brands are considering abandoning their small folding product lines[2]. Although the manufacturers named in the report all denied it, while large folding phones are being updated in an orderly manner, there is no news about new small folding products.

Among the mainstream mobile phone brands, except for Samsung, which is a model worker, most brands' small folding models are short-lived.

The performance that climbs along Moore's Law is the charm of consumer electronics, and it is also its core business model - continuously expanding profits through regular iterations of new products. If a product line is no longer updated, it is probably because it is not selling well.

2024 is the year when a new round of smartphone replacement begins, but the small foldable phone unexpectedly falls behind in the fierce competition.

Stopsmall fold

Halfway through 2024, the annual 6.18 shopping festival revealed the bleak performance of small foldable phones. According to the sales report of small foldable phones released by JD.com, only three of the top ten are new models, which is quite shabby compared to the more than 150 new models in China in the first five months[1].

The first time small foldable phones appeared in the public eye was in 2020. Samsung's first large foldable phone, the Galaxy Fold, which took ten years to develop, died in the last mile of mass production, becoming an epic stain on "Samsung manufacturing". The small foldable Galaxy Z Flip released later was regarded by Samsung as a work of redemption.

Compared to the "half-pound brick phone" Galaxy Fold, the Galaxy Z Flip folds horizontally instead of vertically, and when folded, it is only half the size of a candy-bar phone. The Galaxy Z Flip sold out across the entire network within 30 minutes of its launch, setting an example for the hesitant competitors.

In the following years, various competitors launched small folding products, but most of them did not have subsequent iterations. Behind each product line is a large project involving R&D, production, marketing and personnel deployment. These costs will become sunk costs the moment the product line is cut, which is also a tacit acknowledgement of business misjudgment.

In the report, Guo Mingchi talked about the reasons for the "stop" of small folding phones:Profit margins are too low。

A small foldable phone is essentially a foldable candy bar. That is to say, apart from whether it can be folded, there is almost no functional difference between a small foldable phone and a candy bar phone, which largely limits the pricing of small foldable phones. ability.

When Galaxy Z Flip was released, Samsung priced the small folding phone at US$1,380, which was basically the same as the straight-screen flagship phone Note20 Ultra ($1,299) released in the same year.

Since then, "price close to flagship candy-bar phones" has become an unwritten pricing rule for small folding phones.

The prices of most small folding models of mobile phone brands are almost between the top and mid-range flagship candy-bar phones. The starting price of Xiaomi MIX Flip, which was released not long ago, is exactly the same as that of Xiaomi 14 Ultra, which is 5,999 yuan.

When the flagship candy-bar phones of the same period become the "pricing benchmark" for small folding models, mobile phone brands are left with a thorny cost issue:

Most foldable phones use flexible OLED panels and foldable glass, which means the screen cost is about RMB 1,500 more expensive than that of straight-screen phones on average[5].

The second is the hinge used to connect the upper and lower screens. The hinge determines the number of times the screen can be folded and whether the crease is obvious, which has a decisive impact on the user experience. The Galaxy Fold had difficulty in mass production, and the poor hinge was largely to blame.

Due to the increase in the costs of folding screens and hinges, if the small folding model uses the same lenses, memory, processors and other components as the straight-bar flagship phone, then the cost of the small folding model will naturally be higher than the straight-bar flagship phone, and the profit of the mobile phone brand will be lower.

For example, if two mobile phones are both priced at 5,000 yuan, the BOM cost of the candy-bar model is 3,000 yuan, while the BOM cost of the small folding model is likely to reach 4,000 yuan. Since the positioning and usage scenarios of the two are highly similar, the mobile phone brand will actually earn 1,000 yuan less for each small folding phone sold.

The costs of folding screens and hinges are unavoidable, and to maintain the same profit margin, the only option is to cut back on other components.

Building a temple in a conch shell

In addition to the two rigid costs of the folding screen and hinge, the hinge occupies at least 10% of the space inside the phone and divides the phone into two parts, which brings a lot of additional costs.

The first thing to bear the brunt is the battery. Almost all small folding phones are equipped with two battery modules to make the battery life barely catch up with the level of candy-bar phones of the same period. At the same time, most products use two stacked motherboards to integrate hundreds of chips and electronic components.

Drivers for the inner and outer screens, heat sinks, NFC and other essential components also eat into the precious space of small folding phones.

Every change in design and integrated structure will increase costs. If costs are to be controlled, robbing Peter to pay Paul becomes an inevitable choice.

The camera module was the first to be hurt. The three-camera and four-camera configurations that are common in straight-screen flagship phones are rarely seen in small folding products. On the one hand, it is a cost factor, and on the other hand, the internal space of a small folding phone cannot accommodate a large lens module.

OPPO stuffed a one-inch large-bottom wide-angle lens and a periscope telephoto lens into the Find X6 Pro released in 2023. The small folding product N3 Flip of the same year can only be equipped with three relatively ordinary lenses due to space limitations.

Another enemy of small foldable phones is heat dissipation. Whether due to space limitations or cost considerations, most small foldable models do not use the most powerful processor models at the time.

For example, the Samsung Galaxy S23 uses the Snapdragon 8 Gen2 processor released at the end of 2022, while the small folding Flip 5 of the same period is still using the Snapdragon 865+ released in 2020.

Under the constraints of pricing and cost, all product designers of small foldable phones will face an embarrassing problem:

The increased cost for the folding screen is concentrated in the internal design of the product, which is difficult for ordinary consumers to feel; but the compromises in performance, imaging, battery life and other aspects are clearly reflected in parameter specifications and daily use.

The market has proven that beauty is only an afterthought to performance. Compared with the portability brought by folding, most consumers still care more about the parameters and experience of the core functions of the mobile phone. Most consumers' purchasing decisions may go through the following process:

After watching the press conference, I wanted to place an order on the spot, but after thinking it over carefully, I decided to give up.

As reflected in sales, all manufacturers have paid a heavy price: according to IDC, in 2023, the sales volume of small folding phones in China will be only 2.2352 million units, and OPPO, with the highest sales volume, will only be 811,000 units.

According to Honor CEO Zhao Ming, only when the sales volume of small foldable phones reaches more than 1 million can it achieve break-even through economies of scale. In this case, no small foldable phone will make money in the Chinese market in 2023.

Small is worse than big

The real problem that plagues small foldable phones is that, although a lot of effort and expense have been spent on the application of the folding solution, it has not brought about a completely new usage scenario and experience.

With the lessons learned from countless peers, Xiaomi has obviously racked its brains to find the flaws in its small folding phones.

Xiaomi Mix Flip and Honor Magic V Flip were released only one and a half months apart. One has a 4.01-inch screen and the other has a 4-inch screen. Both have a screen-to-body ratio of over 85%. The essence of the two phones is to migrate more functions that overlap with candy-bar phones to the folded state, such as checking the weather and browsing social media, to increase the usage scenarios of small foldable phones.

Xiaomi Mix Flip also comes packaged as a portable camera set, which essentially takes advantage of the characteristics of the small foldable phone and assembles it with the set into a "Popular Camera".

In addition, in terms of the core functional experience of the small folding phone, the processor performance and battery life of the Mix Flip were almost not sacrificed. It was just that due to the limited internal space, it was impossible to fit an imaging module of the same specifications. In the end, Lei Jun persuaded the executives overnight and set the price to be the same as the flagship candy-bar phone.

Xiaomi Mi MIX Flip Polaroid Set

It is unknown whether the various ideas will work, but the manufacturers' scenario anxiety is exposed. Moreover, there is not much time left for Xiaozhe to add value.

Starting from the second half of last year, the big folding phone started a wave of price cuts.

The price of Honor V Purse released in September last year has dropped to 5,999 yuan, vivo X Fold 3 is as low as 6,999 yuan, and the basic version of OPPO N3 Fold has also been reduced to less than 10,000 yuan.

The effect of the price reduction was immediate. In the first quarter of this year, global shipments of large foldable smartphones increased by 91%[8], ranking first among all smartphone categories. In contrast, shipments of small foldable smartphones declined by 1%.

The problems with small folding are not a problem with large folding.

In terms of pricing, the large folding phone obviously does not have the burden of the small folding phone, and does not need to use the flagship candy-bar phone as a price anchor. This avoids the problem of too low profit margins that mobile phone brands need to face.

Corresponding to the R&D stage, higher pricing brings higher cost space, and product designers have never fought such a rich battle.

The big foldable phone is equivalent to two straight-screen phones spliced ​​together, and the internal space is doubled, which means that the small foldable phone can completely avoid the compromises in imaging, performance and battery life. If it is not for the pursuit of extreme lightness and thinness, the big foldable phone can completely fit the same specifications of components as the straight-screen flagship phone.

Compared with the scene advantages of big folding, small folding is not unjustly called "beautiful waste".

As the screen gets bigger, the large folding screen also brings new usage scenarios, such as mobile office, video, games, etc. In theory, the scenarios that iPad mini can handle can basically be perfectly covered by the large folding phone.

Interestingly, in the past three years when large foldable screen phones have rapidly penetrated the market, Apple accidentally "discontinued" the iPad mini product line.

When the prices of large folding phones drop further, the situation of small folding phones becomes even more embarrassing:The cost ceiling has been blocked by the flagship candy-bar phones, and the pricing ceiling has been blocked by the large folding phones.

On the other side of the ocean, Apple, which has been extremely strategic in recent years, is still unknown how it will make a comeback.