A completely new design featuring the compact dimensions of a phone that can expand to resemble a small tablet would give Apple a competitor to Samsung’s new Galaxy Z Fold4. 

The two companies are pitched in a neck and neck battle for leadership in the smartphone industry: Their quarterly market shares seesaw back and forth at around 20%, depending on the cadence of product launches.

A completely new iPhone format could allow Apple to squeeze out another one percentage point gain in share, according to UBS. This would translate to potentially 250 million units sold in 2024, a 5% increase over its existing forecast.

“If a foldable device compresses the upgrade rate for iPhones or attracts ‘switchers’ from the Android ecosystem, iPhone unit growth could come in above our 238 million estimate,” the investment bank wrote on Tuesday.

Apple CEO Tim Cook relies on the iPhone for every second dollar of revenue. During the company’s first fiscal quarter through the end of December, sales of the product tumbled 8% year on year to $65.8 billion. 

Yet the speculation over a competitor to the Galaxy Z Fold4 further underlines recent fears that Apple focuses too much on expanding its iOS-based software ecosystem and no longer drives innovation in hardware the same way that Samsung has. 

The Korean competitor was already first to address the wearables market with the Galaxy watch before Apple followed two years later in 2015. And Samsung foldable smartphones are already in their fourth product generation after the latest landed in August.

Samsung, which also manufactures flat-screen televisions, has been experimenting for years with one of the hottest technologies in consumer electronics to emerge recently: affordable organic light-emitting diode displays. 

The company’s proprietary brand of “active-matrix” OLEDs offer various advantages, including low energy consumption, brilliant colors, and ultrathin, bendable screens.

OLED displays do not just have the potential to shake up the smartphone market, either. In the Zenbook 17 Fold OLED and ThinkPad X1 Fold, Asus and Lenovo respectively have already launched devices that function as a hybrid laptop-tablet, something Apple is only just now reportedly exploring.

iPhone sales hit by COVID lockdowns in China

As a result, even Apple users regularly poke fun at how innovation at the company seems limited to unveiling a line of new colors for its smartphones. In September, no less than the daughter of Apple’s legendary cofounder, Steve Jobs, mocked the company herself for running out of new ideas. 

The debate over a new foldable form factor for Apple comes at a time when sales of the iPhone were hit after manufacturing partner Foxconn mothballed production at “iPhone City” in Zhengzhou, the largest assembly site for the device worldwide. 

Wedbush Securities estimated the cost of the COVID lockdown to Apple at roughly $1 billion a week in lost iPhone sales. To mitigate future risks, Cook had Foxconn start production of the 14th generation model at the latter’s Indian plant near Chennai.

UBS analysts did voice a note of caution about the potential for Apple to launch a competitor to the critically well-received Samsung Galaxy Z Fold4. 

According to the results of its Smartphone Purchase Intent survey from November, a new design would not likely move the needle when it came to the underlying motivations for buying a new iPhone. 

“We note that a foldable smartphone was deemed least important by respondents,” UBS wrote on Tuesday, reaffirming its below-consensus forecast for 225 million iPhone units sold this year. 

“As such, we believe it is too early to underwrite any potential benefit from the introduction of a new form factor,” it concluded.