The global premium ($600 or more wholesale price) smartphone market, which is increasingly dominated by Apple’s market-defining iPhone, grew 1% YoY in 2022, which allowed the price segment to contribute to 55% of the total global smartphone market revenue for the first time ever, according to Counterpoint Research,
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.
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.
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