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Huawei and Samsung still have much to prove on foldable phones

Doubts over whether Mate X and Galaxy Fold will win over consumers

Samsung's Galaxy Fold, left, and Huawei's Mate X were launched within days of each other. (Nikkei montage)

BARCELONA, Spain/ TAIPEI/SEOUL -- Technology revolutions are notoriously frequent. Yet, even for the fast-moving smartphone market, the launch just days apart of competing foldable phones from Samsung Electronics and Huawei  Technologies marked a surprisingly rapid evolution of the industry's latest innovation.

"Samsung did a first-generation product, but I feel that Huawei has just come out with the second generation," said renowned technology reviewer Myriam Joire of the "Mobile Tech Podcast."

Huawei launched its Mate X phone on Sunday in Barcelona on the eve of the Mobile World Congress, which draws executives, politicians and experts from around the world to the industry's biggest event of the year. The launch followed Samsung's debut four days earlier of its Galaxy Fold smartphone. Together, the new foldables represent one of the most significant innovations in the smartphone industry since Apple unveiled its iPhone in 2007.

However, the challenge now will be to convince consumers that the new technology is worth the hefty price tag of $2,000 or more, while tech experts and analysts are weighing whose flexible phone-tablet will be the winner in the race for a slice of the declining smartphone market.

At first glance, Huawei has won the plaudits. Jeff Pu, a veteran tech analyst at Hong Kong-based GF Securities, says he was surprised to see that Huawei's design appeared to beat Samsung's. It is thinner, folds flat, and the screen is bigger when unfolded, without a notch to interrupt viewing..

"I thought Samsung would be better [than Huawei]," Pu told Nikkei Asian Review.

However the high price and the challenges of producing the flexible screen at volume and consistent quality will be a challenge, he said.

Moreover, neither has yet managed to convince most experts that the foldable revolution will be successful.

"Samsung and Huawei -- the world's two top smartphone companies -- made the foldable phones come true with their advanced technologies. But in terms of market acceptance and engineering challenges, I think foldable phones still have a long way to go," Chiu Shih-fang, an analyst at the Taiwan Institute of Economic Research, told the Nikkei Asian Review.

Samsung spent seven years developing its foldable phone, while Huawei spent three years working just on the special hinge system that allows the phone to fold flat. That kind of engineering comes at a price.

Samsung offers the Galaxy Fold at a price of $1,980, while Huawei's Mate X is even more expensive at 2,299 euros ($2,603).

The high price tags have shocked reviewers and left many wondering at the strategies of both Samsung and Huawei. Last year marked the second annual decline in global smartphone sales since Apple's iPhone electrified users with the possibilities of mobile communication, according to market research company, IDC. Over the last two years, consumers have stubbornly resisted costly upgrades either in favor of lower priced handsets, or have simply held on to their old phones longer.

Meanwhile smartphone makers have struggled to differentiate themselves in the maturing market, with innovations regarded as only marginal advances.

But both companies appear to believe that users will come to see their higher-priced gadgets as two-in-one devices: a phone that unfolds to become a tablet, market watchers said.

The strategy has not convinced analysts. Many consumers own a smartphone and a tablet, but they rarely use the two devices simultaneously, several said. And even with Huawei's unfolded display size of 8 inches, which is bigger than Samsung's 7.3-inch display, the unfolded screen is still smaller than tablets such as Apple's 9.7 inch iPad.

"So when consumers can spend less money to own both a flagship smartphone and a tablet, why would they want to buy a much more expensive foldable phone?" Chiu said. Neither company had "yet proven a foldable phone is a must-have device."

Durability is also an issue, with some reviewers claiming to have spotted creases in the screens of the launch models from both phones. Samsung could have an edge, however, say analysts. It gave more details on durability, for a start. Samsung says its phone can be folded at least 200,000 times in its lifetime, or roughly 100 times a day for five years. Huawei did not quantify how many times its display could be folded before degrading. Nor did it show live demonstrations of how mobile applications operate on its system.

Samsung also has long experience manufacturing the higher-quality OLED screens that are critical to flexible smartphones. Samsung's dominance of the OLED supply chain through its affiliate, Samsung Display, gives the South Korean company an edge in steadily churning out high-quality durable foldable phones.

Huawei's Mate X, meanwhile, uses a flexible OLED screen from newcomer BOE Technology Group, China's top display maker. Analysts question whether Huawei will be able to access a steady supply of consistently high quality screens from BOE.

Moreover, Huawei's decision to design a phone that folds with the screen facing outward -- unlike Samsung, which folds inward -- brings the risk of scratching, even with the separate protective case.

Neither Samsung nor Huawei have allowed reviewers to handle their phones, so the user experience is still unclear. Huawei kept the Mate X locked away inside transparent boxes at its launch, while Samsung only demonstrated some functionalities on stage.

But this is what will finally determine not only whether foldable phones catch on, but who will be best placed to take the lead.

"The ultimate verdict will depend on the software," said tech guru Joire of "Mobile Tech Podcast." "On a device like this, software is really what is going to make the device. We don't know yet how a folding device interface will work."

Some tech experts also question whether the foldable phone will ever appeal to anyone beyond gadget-lovers. "I would love to have both of the phones as I am a reviewer of all gadgets," said Taiwan-based veteran technology blogger Liao A-Hui. "But I wonder whether an ordinary user will find the [foldable] design really useful -- or is it just over-engineering?"

Nikkei staff writer Alex Fang in New York contributed to this report.

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