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Insights Tag： Global Premium Smartphone Market

Premium Market Captures More Than Half of Global Smartphone Revenue in 2022 For First Time

Although overall global smartphone sales in 2022 fell 12% YoY due to macroeconomic difficulties, global premium (≥$600 wholesale price) smartphone sales climbed 1% YoY in contrast, which allowed the price segment to contribute to 55% of the total global smartphone market revenue for the first time ever.

The premium segment, which has been consistently outperforming the global smartphone market, captured more than one-fifth of total global smartphone sales as well.

Global Premium Market Sales and Revenue Contribution, Counterpoint ResearchSource: Counterpoint Research Handset Model Sales

There are several reasons for this growth. Despite the tough market conditions in 2022, affluent consumers were more immune to the macroeconomic difficulties than customers from the lower end. Consequently, sales in the premium market grew, while those in the entry and mid-tier segments declined. Also, as smartphones become more central to their lives, people are ready to spend more on their devices and retain them for a longer period. This is also one of the reasons the $1,000 and above price segment was the fastest growing (38% YoY) in 2022.

Another key factor for growth has been the “premiumization” trend across regions. Demand in the premium segment is driven by people getting an upgrade to their last device. The upgrades are evident not only in mature markets like North America but also in emerging economies where consumers on their third or fourth device start to break into the premium market.

Among OEMs, sales for Apple grew 6% YoY in the premium market, expanding its share to capture three-fourths of the total sales in the segment. Apple could have grown more, if not for the iPhone 14 Pro and Pro Max supply disruption during the peak holiday season in 2022. Apple also gained from Huawei’s decline in China.

Apple was followed by Samsung whose sales declined 5% YoY in 2022. Samsung lost out on the China market opportunity due to its weak presence in the region. The launch of the Galaxy S22 series in 2022 also took place much later than that of the S21 in 2021. However, the growth of foldable smartphones has been a bright spot for Samsung.

HONOR gained from a low base as it expanded its market share in China driven by the Magic series. The brand will make a global push in 2023. Google was featured among the top OEMs growing from a low base, driven by the Pixel 6 Pro and Pixel 7 Pro. Google has increased its focus on the smartphone segment. Apart from these, most Chinese OEMs declined as they derive a significant portion of their flagship sales from the domestic market, where operating conditions were difficult in 2022.

 

Smartphone OEMs Market Share for Premium Segment, Counterpoint ResearchSource: Counterpoint Research Handset Model Sales

In terms of penetration of operating systems, Android has been ceding share to iOS in the premium segment. iOS captured three-fourths of all smartphone sales in the premium market. Considering its revenue share and consistent growth trajectory, the premium market is the most important segment.

Global Premium Market Sales Share, iOS vs Android. Counterpoint ResearchSource: Counterpoint Research Handset Model Sales

For Apple, the growth in mature markets came from the upgrades in its installed base. The stickiness of the iOS ecosystem with multiple devices and services is high. If an iPhone user also owns an Apple Watch or Mac, the individual’s next smartphone upgrade will likely be another iPhone. Also, because of Apple’s aspirational brand value and step-by-step expansion, its sales have been growing in emerging economies as well. Android’s loss of share to iOS in the premium segment is also one of the reasons for Google’s smartphone push.

However, Android could see a new wave of growth in 2023 as we expect more OEMs to launch foldable devices in the premium segment this year. Existing foldable offerings in China are set to expand to markets outside the country. We will also see HONOR pushing into the European market to gain share this year.

The analysis is based on the Global Premium Smartphone Market Analysis report, available for purchase here.

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MWC 2023 Day 1: HONOR Magic5 Series Launch, OnePlus 11 Concept, and more
$1000 No Longer a Barrier for Smartphone Adoption
Macro Index Ends 2022 with Quarterly Drop

 

Global Premium Smartphone Market Sales Reach Highest Ever in 2021

Beijing, London, San Diego, Buenos Aires, New Delhi, Seoul, Hong Kong – March 22, 2022

The global premium (>$400 wholesale ASP) smartphone market sales grew 24% YoY in 2021 to reach their highest ever level, according to Counterpoint Research’s Market Pulse Service. The growth in the premium segment outpaced the 7% YoY growth in the overall global smartphone sales in 2021. The premium segment alone contributed to 27% of the global smartphone sales, its highest ever share.

Global Premium (>$400) Smartphone Market Sales Contribution, 2016-2021

Source: Counterpoint’s Global Monthly Handset Model Sales (Sell-through) Tracker

Commenting on the premium market growth in 2021, Research Director Tarun Pathak said, “The premium market growth in 2021 was driven by a mix of factors, including replacement demand, OEM strategies and supply chain dynamics. Upgrades to the affordable-premium segment in emerging economies and replacement demand for 5G devices in advanced economies continued to drive growth. OEMs including Apple, OPPO, vivo and Xiaomi were aggressive in capitalizing on the premium market gap left by Huawei, especially in China and Western Europe, driving growth in the segment. Amid the supply chain woes, the ecosystem players also prioritized the premium segment devices due to increased margins and profitability. The growth rate was also somewhat higher in 2021 due to the sales and launch schedules in 2020 being impacted by the pandemic.”

In terms of OEMs, Apple continued to lead the market, reaching the 60% sales share mark for the first time since 2017 driven by strong 5G upgrades for the iPhone 12 and iPhone 13 series. The delayed launch of Apple devices in 2020 also pushed demand to 2021. Apple, with its strong brand power, is in the best position to gain Huawei’s premium smartphone users. This is also indicated by Apple’s growth in China, where the brand reached its highest ever market share in Q4 2021. Apple was the top OEM in the premium segment in every region in 2021.

Global Premium (>$400) Smartphone Sales Share by OEM, 2020 vs 2021

Source: Counterpoint’s Global Monthly Handset Model Sales (Sell-through) Tracker

Samsung’s sales grew 6% YoY in the segment, but the OEM lost share. The S21 performed better than the pandemic-hit S20. The Galaxy Z Fold and the Flip series, which were launched in H2 2021, also performed well, especially in South Korea, North America and Western Europe. However, these gains were somewhat traded off due to the lack of a new Note series and an FE series refresh in 2021. Component shortages also affected the brand’s supply.

OPPO and vivo’s sales more than doubled in the premium segment in 2021, growing 116% and 103% respectively to help them make inroads into the top five premium brands in several regions. The rebranding of Reno in early 2021 helped OPPO capture the affordable-premium segment in China. OPPO has also been gaining steadily in the European market, aiming to fill the gap left by Huawei. vivo’s growth was driven by the X60 and X50 series in China and Southeast Asia.

Xiaomi’s gains were driven by the Mi 11 series. Xiaomi featured in the top-five list for the premium segment in almost all the regions where it operates. Asus also gained with its focus on the niche gaming segment. LG’s exit from the smartphone market helped Motorola, Google and OnePlus gain in the North American Market.

Global Smartphone OEM Rankings by Region, Premium (>$400) Segment, 2021

Source: Counterpoint’s Global Monthly Handset Model Sales (Sell-through) Tracker

In terms of cellular access technology, 5G has become a standard offering across the premium segment. But 4G continues to have share driven by the older iPhones – 11 and SE 2020 – and the Samsung S20 FE. However, as these product lines also transition to 5G in 2022 and 5G also starts to make inroads into developing regions, the share of LTE will decrease further. But Huawei will continue to launch its new devices with LTE capability.

5G vs 4G Penetration in Premium (>$400) Segment

Source: Counterpoint’s Global Monthly Handset Model Sales (Sell-through) Tracker

Commenting on the premium segment outlook, Senior Analyst Varun Mishra said, “Going forward, the premium segment, driven by the replacement demand across markets, is likely to keep growing and outpace the global smartphone market growth. Another large opportunity driving the segment would be the installed base of Huawei users in China, which is approaching its replacement cycle. The competition in China’s premium segment has been strong, but Huawei maintaining its second position in 2021 indicates a future opportunity for other OEMs. Further, the launch of foldables at a lower price than before will also drive growth in the premium market. Samsung has showcased foldables as a viable market. A foldable phone from Apple will be a nod to the robustness of the technology and further drive growth.”

Note: The analysis is based on wholesale ASPs; OPPO excludes OnePlus.

Please reach out to press@counterpointresearch.com for press comments and inquiries.

You can also visit our Data Section (updated quarterly) to view the smartphone market share for World, USA, China, and India.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Tarun Pathak

 

Varun Mishra

 

Karn Chauhan

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