Are foldable smartphones finally good?

Despite years of marketing efforts by South Korea’s Samsung Electronics, foldable smartphones can still seem like niche toys. But there are signs that are starting to change. Samsung said the number of Galaxy Z Fold 3 and Z Flip 3 phones sold in the month following their August launch exceeded the total number of foldable devices sold in 2020. Overall, it shipped four times more foldables in 2021. in last year. According to Counterpoint Research, Samsung accounted for about 84 percent of the foldable market.

The low price point has attracted consumers: Samsung’s Galaxy Z Flip 3 costs around $1,000, which is in line with other high-end smartphones like the iPhone 13 Pro. The Galaxy Z Fold 3 costs around $1,800, but is cheaper than its predecessors. The original Galaxy Fold sold for around $2,000 in 2019. Samsung has also ironed out some of the earlier problems, creating a sturdier screen and better hinges.

Counterpoint estimates that foldable smartphones represent just 8.6 million of last year’s 1.4 billion smartphone shipments. But the flip side of being smaller is that the market can grow rapidly: Last year’s foldable shipments were nearly triple what they were the year before, and Counterpoint expects them to triple again to 25.7 million in 2023.

Their higher prices mean that foldables also contribute more to profits. Credit Suisse estimates that their share of Samsung’s operating profit from smartphones was 8% last year, which could rise to 16% in 2023. As it’s becoming increasingly difficult to persuade consumers to pay for a new phone, a foldable version—with its larger screen than would otherwise fit in a pocket—could be a way out.

In the near future, supply constraints may stifle the growth in foldables. In addition, the challenge will come from other smartphone makers: Chinese brands such as Oppo and Honor are entering the market. It will eat into Samsung’s market share — Credit Suisse expects it to drop to 65% by 2025 — but is also likely to drive widespread adoption, lowering costs. Samsung also benefits from supplying other phone makers with flexible screens called organic light-emitting diodes, or OLEDs, a market it is likely to dominate.

Samsung will certainly hope this is the year to turn the flop into foldables.