In a quest for increased display sizes and new forms of hardware differentiation, leading smartphone OEMs are turning to new solutions to increase the effective display viewing area without increasing the overall physical size of the devices.

With the rise of super-fast 4G networks and beyond, smartphones have become primary devices from a content creation and consumption perspective — driving demand for bigger displays. Clearly, there is a practical limit to the physical size of a smartphone, typically determined by the size of the user’s hands or pockets. As a result, rather than increase the size of the device, handset OEMs are turning to solutions which increase the effective viewing area of the displays without increasing the overall size of the phones. These include bezel-less designs and new aspect ratios. Yet another solution, available in the near future, will be that of foldable displays, which could allow 10-inch tablet-sized displays to be folded and accommodated in a compact 5.5-inch smartphone-sized design.

With Sharp’s Aquos, we have already seen one of the first phones trying to break shackles on bezels in 2014. However, it was not successful due to limited roll-out, poor battery life and a bulky design. So was Xiaomi’s Mi Mix, launched in 2016 with much fan-fare but bench marked heavily on Sharp’s initial design. While more of a proof of concept and only available in limited quantities, it also suffered from a bulkiness that deterred many.

Fast forward to 2017, the vertically integrated Korean smartphone brands LG and Samsung, leveraging their display business and technologies, are getting it right. The LG G6 sports a beautiful LCD-based 18:9 display and Samsung’s Galaxy S8 series shows-off a much brighter, color-rich curved OLED display. Apple is rumored to also launch an OLED version bezel-less display in its “special edition” smartphone later this Fall, marking its tenth anniversary for the iPhone. This should drive the bezel-free or alternative aspect ratio trend into a high scale and high demand feature.  Next year’s flagships from competing brands will have to toe the line or risk being marginalized; the OnePlus 5 already feels like a throw back rather than a progressive design, for example.

As with most areas of hardware differentiation, with few suppliers controlling OEM’s access to this technology, the sustainability of the differentiation is levered to availability and supply. For 2017 both are likely to be limited, meaning those that gain access to the technology will be able to eke out some level of differentiation. While every brand would like to join the bandwagon, there will be serious supply constraints this year and the first half of next year to match the demand. This will keep prices high and also enable deep-pocketed OEMs to lock-in the major part of supply. However by 2018 supply and availability issues should ease, and the amount of content formatted for 18:9 aspect ratio displays will become more widespread, leading to greater adoption. Samsung Display, JDI, LG Display should be the major beneficiaries alongside display driver IC players. Chinese display manufacturers such as Tianma, BOE should also contribute by supplying these new wider, bezel-free displays to a growing crop of Chinese brands in the latter part of next year.

The trend towards bezel-less designs and 18:9 aspect ratio displays and the benefits and downside of both solutions, is captured in our in-depth report (here), which further evaluates whether these trends are likely to be adopted by all OEMs.

Counterpoint forecasts that more than 120 million smartphones including these differentiated, alternative aspect ratio and near bezel-free displays will ship in 2017, accounting for almost 7% of total smartphone shipments this year. This demand will more than triple next year as we see supply issues ease and more OEMs will be able to offer bezel-free flagship models in their portfolio in the second half of 2018.

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