Smartphone makers need to tread carefully in their hunt for elusive growth opportunities this year.

The overall market is expected to shrink again in 2023, according to IDC, which predicted earlier this month that continued weak demand in the first half will result in global shipments falling to 1.19 billion from 1.2 billion in 2022. A proper recovery isn’t expected until 2024.

However, there are expected to be some bright spots shining through all the gloom. The analyst firm predicted on Wednesday that shipments of foldable handsets will jump 50 percent this year to reach 21.4 million units. Volumes are expected to reach approximately 48.1 million by 2027, representing a compound annual growth rate (CAGR) of 27.6 percent over the forecast period.

IDC said the growth is being driven by a slight decline in average selling price (ASP) coupled with improved build quality and durability, which is pulling in more punters.

“The foldable phone market finished [2022] slightly higher than previously forecast as consumers start to embrace the new form factor,” said Anthony Scarsella, research manager, mobile phones at IDC. “A 10 percent decline in ASP helped the market grow 75.5 percent in 2022, as foldable devices became more affordable in numerous markets. With new vendors and models joining the race this year, we expect the foldable market to be the one bright spot in 2023.”

Indeed, IDC research director Nabila Popal said consumers need new motivation in order to go out and upgrade their handset. “Foldable devices currently bring that ‘wow factor’ and I believe they will continue to grab more headlines and outperform non-foldable smartphones over the next five years,” she predicted.

Meanwhile, other segments within the smartphone market are proving to be too risky a bet for some.

Chinese OEM Lenovo confirmed to Android Authoritythis week that it has closed its Legion gaming phone division. It didn’t provide an explanation as to why, but the best guess has to be that it wasn’t selling enough of them to justify carrying on. Similarly, Xiaomi last year tried to offload its Black Shark gaming phone division to Tencent. However, local media reported (in Chinese) in October that the deal had stalled, and Black Shark had shed 50 percent of its staff.

The gaming phone market seems to be a tough nut to crack. The devices themselves pack in high-end hardware, from the screen to the processor, high-capacity batteries and advanced cooling. It makes for a great mobile gaming experience, but it jacks up the price, weight, and thickness of the product. This limits their appeal somewhat.

In addition, the typical punter who has that much money to spend on a smartphone is more likely to be in an age group that favours the latest iPhone or Samsung Galaxy over a dedicated gaming phone. That leaves kids and young adults that already own (or don’t want) a Nintendo Switch or Steam Deck, and who aren’t that bothered about having an iPhone, or Galaxy S23 or Z Fold. Not exactly mass market.

There are some OEMs that are sticking it out. Taiwan-based PC hardware maker ASUS has extended its ROG gaming brand into the smartphone space. According to various outlets, Android Centralbeing one of them, its latest handset, the ROG Phone 7, is expected to launch on 13 April. Similarly gaming smartphone brand Redmagic launched its latest device in February. PC peripherals maker Razer seems to think the mobile gaming market is big enough to support dedicated hardware as well. In January it showed off a 5G handheld in partnership with Verizon, the Razer Edge 5G.

These products may well garner a large enough following to keep these OEMs in the game, but with the smartphone market expected to be in for another lacklustre year, it seems a tall order. A foldable might prove to be a safer bet.

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