Consumers are spending money on premium smartphones in tough economic conditions, the report said

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In the midst of the declining smartphone market, premium devices are having their moment. According to a report by Counterpoint, these expensive devices accounted for more than half of the global smartphone market revenue.

The analysis firm’s report says that shipments of premium devices (with a wholesale value of $600 or more) will grow 1% in 2022 from a year earlier, accounting for 55% of all smartphone revenue. This is significant given that the smartphone market is down 11% in 2022 compared to 2021.

There is no prize for guessing the absolute winner of this market: Apple. The company had a massive 75% market share in the premium segment, 6% more than last year. Counterpoint said Apple could have captured even more of the market if it hadn’t faced supply restrictions for the iPhone 14 Pro and Pro Max.

A graph of the revenue share and market share of premium smartphones. Image Credits: Counterpoint

The Cupertino-based company also benefited from Huawei’s decline in China, the report said. However, Honor, which spun off from Huawei, recorded remarkable growth with its Magic series in China. The brand has global ambitions this year and recently launched flagship devices, including a foldable phone at the Mobile World Congress (MWC) in Barcelona.

While both Honor and Google’s share of the premium smartphone segment will more than double in 2022 from 2021, they still only account for about 1% of the pie, so they’re still significantly smaller players. Other companies such as Samsung and Xiaomi saw their market share fall by 5% and 44% respectively. However, the research firm said that the foldable smartphone category, which is expected to grow 52% this year, remains a bright spot for Samsung.

Image Credits: Counterpoint

Counterpoint analyst Varun Mishra said that people who bought premium smartphones were willing to pay extra for a device’s longevity and better features, leading to a 38% increase in sales of phones worth more than $1,000 by 2022 compared with 2021.

“Despite the difficult market conditions in 2022, affluent consumers were more immune to the macroeconomic difficulties than lower-end customers. As a result, sales in the premium market grew, while those in the entry and mid-range segment declined. As smartphones become more central to their lives, people are also willing to spend more on their devices and keep them for a longer period of time,” he said.

In particular, users in emerging markets are also upgrading to premium smartphones, especially those on their third or fourth device. Companies such as Apple, which is mainly active in the premium segment, are increasingly focusing on markets such as India. Bloomberg recently reported that the company has designated India as a separate sales region.

While Apple (and by proxy iOS) has a comfortable majority in the premium segment, the launch of foldable devices this year could give Android a chance to regain some market share. On the other hand, analysts think Apple will raise the price of Pro models launching this year, which could give the company an edge in terms of revenue.

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