Global Premium Smartphone Shipments Cross 50% Mark In Revenue For The First Time

While sales of smartphones overall are slowing down, people still have an appetite for new gadgets. They're just looking for more premium options, with better brands and capabilities. In 2022, the overall smartphone market slowed down and fell by 12% year on year. However, the average price of phones climbed by 1%. As a result, premium smartphones that cost more than Rs 30,000 contributed 55% to the total global smartphone market revenue, marking the first time that premium smartphones accounted for more than 50% of overall sales.

According to CounterPoint Research, this trend has been ongoing for a while. They highlighted this trend a week ago when Samsung established itself as the preeminent smartphone brand in India, outflanking Xiaomi with more premium models. The premium segment of the market now accounts for 21% of the overall market as well.

CounterPoint's report suggests that even with global issues like inflation and the semiconductor shortage, affluent consumers are still willing to spend on smartphones. “As smartphones become more central to their lives, people are willing to spend more on their devices and retain them for a longer period. This is also one of the reasons why 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 upgrading from their last device. These 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”, according to the report.

Apple was the biggest gainer as expected, with a 6% year-on-year increase in the premium market. It accounts for three-fourths of the total sales in this segment. However, Apple could have achieved even more if it hadn't faced supply chain disruptions due to COVID19 lockdowns, which affected the production of the iPhone 14 Pro and iPhone 14 Pro Max models.

Samsung also gained 5% in the segment, but its weak presence in China prevented it from achieving even more. Meanwhile, Google entered the top smartphone OEMs segment for the first time, thanks to the positive response to the Pixel 6 and Pixel 7 smartphones.

In the premium segment, Apple's iOS now controls 75% of the market, causing Android to lose market share. Apple's success is due to its loyal install-base in mature markets, the iOS ecosystem, and the strong brand. However, Android could regain its position, as many more OEMs are expected to launch Foldables in 2023.