Goldman Sachs' latest research report on China's smart phone industry: Foldable phone patents surge, new forms and component upgrades drive growth. The institution reviewed patents and new models of foldable phones, holding an optimistic outlook on the future market penetration of foldable phones. The report emphasizes a significant increase in patents submitted in 2024, reflecting the following trends: 1) development of new forms, transitioning from flip and horizontal foldable phones to tri-fold and quad-fold phones, which is expected to enhance the value of the supply chain; 2) component upgrades: more durable panels and newly designed hinges, especially for tri-fold phones, driving industry standards upgrades; 3) more brands joining the foldable phone trend, researching foldable phone patents to increase market penetration and potentially bring more affordable prices. The report specifically mentions Huawei's tri-fold phone and gives "buy" ratings to AAC (acoustic, lens, hinge), SzS (hinge), Fostek (hinge), Foxconn/Luxshare (iPhone assembly), Largan (lens).
The report provides a detailed analysis of the public patent situation of major brand manufacturers. Since 2010, smart phone brand manufacturers have actively applied for patents. Compared to 2023, the number of foldable phone patents in November 2024 has increased, supporting the introduction of new foldable phone models, benefiting the entire foldable phone supply chain. According to patents published by the China National Intellectual Property Administration, Huawei leads with 355 patents, followed by Honor, Samsung, Vivo, Xiaomi (01810), Apple (AAPL), and OPPO, with 268, 249, 171, 110, 58, and 27 patents respectively. The report summarizes the key focuses of recent foldable phone patents: new forms of tri-fold/quad-fold phones, durable panel and hinge upgrades. It is expected that these new forms will increase user adoption and benefit foldable phone suppliers.
Goldman Sachs' analysis of the industry and future outlook shows that the global smart phone market is expected to grow by 4% and 3% in 2024 and 2025, respectively.
The report also predicts the foldable smart phone model pipelines of major suppliers from 2023 to 2025. Goldman Sachs believes that with more brands joining the foldable phone trend, along with technological advancements and cost reductions, the foldable phone market will continue to grow, especially in new forms and component upgrades. Investors are advised to focus on key component manufacturers in the foldable phone supply chain, as well as brands leading in new forms and technological innovations.
