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.

Source: 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.

Source: 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.

Source: 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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