Essential Phone was first to embrace the so-called notch display in smartphones. But it was the iPhone X that led to the widespread discussion and even criticism in various sections of the media. However, as iPhone X users decided to embrace the notch, the discussion has recently shifted to the Android camp with tier-one brands launching their flagships with notch displays, with the Asus Zenfone 5 during MWC 18, followed by OPPO’s F7, Vivo’s V9, Huawei’s P20 and P20 Pro. Others too are likely to follow this trend.

Market Size:

• According to Counterpoint Research’s Market Forecast 2018, some 300 Million smartphones, equating to 19% of the total to be sold this year, will have a notch display.
• Android smartphones will contribute to 55% of such devices with Apple accounting for the rest.
• Huawei, OPPO, Vivo and Xiaomi (HOVX) smartphones with notch displays will likely exceed 100 million units in sales in CY 2018.
• Apple, however, will lead the segment by likely capturing 45% of smartphones with notch displays, as we expect Apple will adopt the notch display in its next series iPhones.
• Most of the tier-one Android OEMs will embrace notch displays in their flagships first. However, the adoption of notch displays in sub $200 price bands from tier-one brands will depend on a combination of competitive pressure and consumer feedback.

Source: Counterpoint Research Market Outlook 2018

Why Notch:

Below are some of the reasons why the notch, which started off as a rather unpopular design choice, is suddenly being adopted by Android OEMs in their flagship launches:

• The reason for using a notch display varies among OEMs. For Apple, it was the result of a complex trade-off – moving to a full screen meant losing the home button and its fingerprint sensor. Apple felt the under-screen fingerprint sensing was not good enough, so employed Face ID as an alternative. The sensor array to manage Face ID is large and forced the use of the notched display.
• For other tier-one brands the use of a notch is partially about maximizing display area, but also betrays a lack of innovation involving under-screen placement of critical components.
• Also, there is a possibility that the display manufacturers that are developing displays with notch support are pushing the ‘feature’ to other handset manufacturers.
• For many tier-two and long-tail Android brands, the notch is about chasing a design language closer to Apple, to target aspirational buyers in the low-end segment.
• This has triggered the launch of notch display smartphones in the sub $150 segment. We won’t be surprised if local kings in their respective countries will enter a race of launching the cheapest notch display smartphones, aimed at short-term differentiation.
• During MWC18, eight different Android OEMs launched smartphones with a notch display. Apart from Asus and Wiko, none were from prominent brands. Most of the implementations were essentially copying Apple’s design language, were poorly integrated from a software perspective and had little functional purpose.
• Post MWC 18, however, we have seen leading brands like OPPO, Vivo & Huawei announcing their flagship devices with the notch display. It was evident, that these Android flagships have done their work around full view display and even the notch, but still a clear reason to go for a notch is missing, and is, at least in part driven by a need to adopt design language similar to that of Apple. However, OEMs like Huawei went one step further and gave users the option to turn off the notch.
• If we look at the current hardware limitations which have given rise to notch displays, the prominent ones are the front camera followed by the front speakers and sensors
• This also means that OEMs, as of now, don’t have many choices when it comes to achieving more than 80% body to screen ratio
• Solution around some of the component placement can be worked around by placing them under the display. For example, speakers can still be situated under the display, using either the display itself as a speaker or through some form of bone conduction. The performance however, is usually quite poor. Similarly, it will soon be possible to position some sensors under the glass, but any immediate solution looks unlikely.
• For the front-facing camera, the current options include: positioning at the bottom of the device or, as Vivo has done with its APEX concept phone, having the camera pop-up from the top of the device. This could also provide options for a rotating pop-up camera or even a multi-direction camera that could also capture 360-degree views. Xiaomi too, with its Mi Mix series, has demonstrated a different design language in an attempt to achieve a true bezel-less display.
• For display suppliers, the notch creates several manufacturing challenges which can lead to a lower yields and drive-up costs. The additional demand for novel aspect ratios is creating more heterogeneity, limiting potential economies of scale for display manufacturers.

Smartphones with the notch display emerged because of Apple. Android OEMs have followed Apple’s design lead, not  having  too many other options to choose from.. We expect Android devices with notch display to stay around at least for couple of years. Google too, has recently announced the first Android P developer preview, where it is offering native support for notches. Android P will try to bring support for the notch, but to reach mass market it will also have to be adopted in Android One and Android Go devices.