Apple and Huawei Turn to Foldables as Global Smartphone Shipments Face 17% Drop

A Bet on Form Factor When Volume Stalls

The smartphone industry is reaching for a new playbook. With global shipments projected to contract by 17 percent this year, manufacturers are pivoting toward premium form factors that promise higher margins even as unit volumes slide. Next week's product unveilings from Apple and Huawei will test whether foldable designs can inject momentum into a market that has lost its growth trajectory.

Apple's September 9 showcase will feature John Ternus in his first major keynote as CEO, a leadership transition that coincides with the company's most significant hardware gamble in years. Industry watchers expect the Cupertino firm to introduce its inaugural foldable iPhone alongside refreshed standard models, marking a category entry that competitors have occupied since 2019. The timing reflects both defensive positioning and a calculated wager that flexible displays have matured enough to meet Apple's quality thresholds and customer expectations.

Huawei, meanwhile, continues to expand its foldable portfolio despite export restrictions that have reshaped its supply chain. The Shenzhen-based company has carved out a leadership position in the foldable segment across China and parts of Asia, where consumers have shown greater willingness to adopt unconventional form factors. Its next-generation device will arrive into a market where the company has already shipped millions of foldable units, giving it operational learning curves that Apple lacks.

Memory Supply Constraints Add Pressure

The product launches unfold against a backdrop of tightening component availability. Memory suppliers have signaled capacity constraints for high-bandwidth DRAM and NAND flash, driven by surging demand from AI infrastructure buildouts and data center expansions. Smartphone makers now compete with hyperscale cloud providers and enterprise hardware vendors for the same advanced memory packages, a dynamic that has pushed spot prices upward and lengthened lead times.

At DailyTechWire, we've tracked how memory allocation disputes have already delayed product roadmaps in the Android ecosystem this year. For foldable devices, which typically require more memory to support dual-screen multitasking and higher-resolution displays, the crunch is particularly acute. Manufacturers must choose between accepting higher bill-of-materials costs or scaling back specifications, neither of which aligns well with the premium positioning that foldables demand.

Apple's vertical integration and long-term supply agreements may insulate it from the worst procurement challenges, but even the company's buying power has limits when foundries are running at capacity. Huawei faces a more complex calculus, navigating both memory shortages and the persistent effects of US semiconductor sanctions that restrict access to cutting-edge process nodes.

The Margin Calculus Behind Foldables

Foldable phones carry average selling prices two to three times higher than conventional smartphones, a margin profile that becomes essential when overall volumes decline. For Apple, entering the foldable category offers a path to sustain revenue growth even if iPhone unit sales flatten or contract. The company has historically used product line extensions - larger screens, Pro variants, premium materials - to extract more value from a maturing installed base, and foldables represent the next iteration of that strategy.

Huawei's calculus differs. The company's domestic market share has rebounded since its low point in 2021, but international revenue remains constrained. Foldables allow Huawei to command premium pricing in the markets where it still operates, offsetting volume losses in regions where it has been effectively shut out. The devices also serve as technology demonstrators, signaling continued innovation capability despite geopolitical headwinds.

Both companies face the challenge of converting early adopters into a sustainable customer base. Foldable penetration remains in the low single digits globally, held back by durability concerns, software optimization gaps, and pricing that puts the devices out of reach for most buyers. The question is whether 2026 marks an inflection point - when hinge mechanisms, screen coatings, and app ecosystems have improved enough to broaden appeal - or whether foldables remain a niche within a niche.

Competitive Dynamics in a Shrinking Pie

The smartphone market's 17 percent contraction reflects a confluence of factors: lengthening replacement cycles, macroeconomic uncertainty in key markets, and a lack of compelling hardware upgrades that justify device swaps. Chinese manufacturers have engaged in brutal price competition to defend share, compressing margins across the Android ecosystem. Apple has largely avoided the price war, but it has seen modest volume declines in markets like China, where local brands have regained ground.

Foldables introduce a new dimension to this competition. Samsung has led the category for years but has seen its dominance erode as Chinese rivals - Oppo, Vivo, Xiaomi, and Huawei - have launched competitive models at lower price points. Apple's entry will reshape the landscape, particularly in North America and Europe, where iOS loyalty remains strong and carrier subsidies can mask sticker shock.

For Huawei, the foldable strategy is also about regaining visibility. The company's flagship launches generate media attention and retail foot traffic that benefit its entire product line, from mid-range phones to wearables and laptops. In markets where Huawei still competes, a well-executed foldable can shift brand perception and create halo effects that drive sales across categories.

What the Launches Signal

Next week's announcements will offer clues about how the industry plans to navigate the next 18 months. If Apple positions its foldable as a halo product with limited availability - testing demand before committing to volume production - it signals caution. If the company integrates foldable options across multiple price tiers, it suggests confidence that the category can scale.

Huawei's launch will reveal how much progress the company has made in securing advanced components under sanctions and whether it can maintain its foldable cadence as memory and display supply tighten. The technical specifications, particularly around processor nodes and memory configurations, will be scrutinized for signs of supply chain adaptation or constraint.

Both events arrive at a moment when the smartphone industry is searching for its next growth vector. Foldables are not a panacea - they address a narrow slice of the market and carry execution risks that conventional slabs do not. But in a year when shipments are falling by double digits, the category represents one of the few areas where manufacturers can still command attention and pricing power. Whether that proves enough to stabilize the broader market remains an open question, one that next week's launches will begin to answer.