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Premium Smartphone Segment Captures Over One-Fifth of the Smartphone Sales

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December 29, 2018
According to Counterpoint Research’s Market Monitor Q3 2018, the global premium smartphone segment** continues to grow faster than the overall smartphone market. The growth in the third quarter was driven by new iPhone launches along with the flagship launches of key Chinese OEMs such as OPPO and vivo. Market Summary:
  • The global, premium smartphone segment grew faster (+19%) than the overall smartphone segment (-5%) in Q3 2018. Growth was driven by new iPhones and flagship launches of Chinese players like OPPO and vivo.
  • The premium smartphone segment represented 22% of the global smartphone market share during Q3 2018.
  • Close to 40 OEMs compete in the premium segment globally, out of which the top five players account for almost 89% of shipments.
  • Apple led the global premium smartphone segment capturing 47% share of the segment, followed by Samsung (22%), Huawei (12%), vivo (5%), OPPO (5%) and Xiaomi (3%).
  • Huawei’s share (12%) in the premium segment hit double digits for the first time.
  • Within the premium segment, the $400-$600 price-band was the sweet spot as it contributed 46% to the total premium segment by volume.
  • There is slightly more brand diversity in the premium smartphone segment now as brands are targeting the premium segment to strengthen their bottom-line profits.
  • The mix between price bands remains somewhat unstable. The price bands comprise relatively few high-volume models, therefore a change in a wholesale price of one product that shifts it out of a price band can lead to sharp change in the overall size of the price band itself.
  • Samsung led the $400-$600 segment with 25% share followed closely by Apple (21%), Huawei (17%), vivo (10%) and OPPO (7%).
  • OnePlus remains one of the fastest growing brands in the $400-$600 segment. OnePlus sales were driven by India, China and the UK. In India, OnePlus continues to lead the premium smartphone segment for the second successive quartercapturing 30% of the market driven by the strong performance of its OnePlus 6. It was also amongst the top five premium smartphone OEMs in France (#4), Germany (#4), Italy (#4), Netherlands (#4), Sweden (#4) and UK (#4) due to strong initial sales of the OnePlus 6.
  • In the $600-$800 segment, Apple and Samsung volumes represented 81% of shipments while Huawei share increased driven by P20 series shipments.
  • In the $800+ segment, Apple clearly dominated with 80% share during the quarter.
  • The premium segment growth for OPPO, vivo and Xiaomi was driven by performances in China. For OnePlus and Huawei, growth was generated outside China. OPPO R17 and Find X drove volumes for OPPO while X23 and Nex series did well for vivo.
  

Exhibit 1: Q3 2018 Premium Smartphone Segment Competition Trends Across Price Tiers*

 

Source: Counterpoint Research Market Monitor Q3 2018

 
  • Apple and Samsung sales continue to be driven by developed markets like the USA, China, Japan, Korea and countries in Western Europe.
  • Google enters among top five premium smartphone brands in WE during the quarter.
  • Below are the top five brands in the premium segment by different regions.
  Exhibit 2: Premium Smartphone Segment Rankings of OEMs by Regions Q3 2018  
NAM MEA LATAM WE CEE CHINA APAC Excl China India
Apple Apple Samsung Apple Samsung Apple Apple OnePlus
Samsung Samsung Apple Samsung Apple Huawei Samsung Samsung
LG Huawei Huawei Huawei Huawei vivo Sony Apple
Motorola Xiaomi Motorola OnePlus LG OPPO OnePlus Asus
Google OnePlus LG Google OnePlus Xiaomi Huawei Huawei
Source: Counterpoint Research Market Monitor Q3 2018     Going forward, we estimate that the premium smartphone segment will grow in Q4 2018 driven by a full quarter of sales of new iPhones. We further expect that vertically integrated companies will leverage their expertise to gain share in the segment. In terms of distribution, premium brands sales are skewed in favor of offline retail. The major MNOs and multichannel stores remain the primary channel for these devices. This is especially true in European markets. This share has been gradually increasing as independent retail stores have been under pressure due to the operators moving away from direct subsidy.   *Pricing analysis is based on wholesale pricing ** Premium segment >$400

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Author

Tarun Pathak

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Tarun is a Research Director with Counterpoint Research, based out of Gurgaon (near New Delhi). Tarun has 10 years of work experience with a key focus on the evolving mobile device ecosystem with specialties in Emerging Markets. He understands specific mobile industry nuances, helping clients to navigate through the rapidly changing technological trends. As a Telecom Analyst he has been quoted extensively by the leading media platforms. Tarun holds a Post Graduate Diploma in Management, specializing in International Business from the Amity International Business School and is a graduate in Physical Sciences from Jammu University, Jammu in the northern Indian state of Jammu & Kashmir.