Global premium smartphone market sales grew by 24% year-over-year in 2021 to reach their highest ever level, according to Counterpoint Research.
Per Counterpoint Research’s definition, a smartphone is only considered to be premium if it has a selling price of $400 (Kshs 45,000, going by current exchange rates) or higher.
The global overall smartphones sales increased by 7% compared to 2020, with the premium smartphone sales contributing to 27% of the units shipped.
Tarun Pathak, the Research Director at Counterpoint Research, says the record growth was driven by a mix of factors including replacement demand, OEM strategies, and supply chain dynamics.
He also thinks the emerging economies embracing the affordable premium segment (middle-range smartphones) and the demand in developed economies for 5G devices were also crucial in driving the growth.
Pathak also notes that the market gap left by Huawei incentivized other OEMs including OPPO, Vivo, Xiaomi, and Apple to aggressively push their premium smartphones in regions previously dominated by the Chinese company, especially in China and Western Europe.
The supply chain woes, which have been a recurring story over the past year or so due to the COVID-19 pandemic, also had their part to play in driving the growth. Various device makers preferred prioritizing the limited amount of chips that they had to be used in their flagship devices because of the increased margins and profitability.
In terms of market share by each OEM, it is no surprise that Apple continued to lead the market for premium smartphones, with a 60% sales share mark. The delayed launch of their devices in 2020 pushed the demand to 2021 while the iPhone 12 and iPhone 13 Series supporting 5G connectivity proved to be a huge win in the US market, driving sales by a considerable amount.
Samsung was second with a market share of 17%, however, this was an overall loss from 20% in 2020. Despite the drop, the Galaxy S21 and Galaxy Z Fold and Flip series performed well, especially in Western Europe and South Korea.
The good performances were however negated by the lack of a new Note Series and an FE series refresh, which got its release in 2022. Chip shortages also seemed to affect Samsung more than other companies.
Third to fifth positions were held by Huawei, Xiaomi, Oppo, and Vivo with a market share of 6%, 5%, 4%, and 3% respectively.
Vivo’s growth is attributed to the X60 and X50 series performing well in China, while Oppo’s rebranding of Reno played a huge part in capturing the midrange segment in Europe.
Xiaomi’s steady growth on the other hand is largely credited to the Mi 11 Series, which played a huge part in the Chinese company featuring in the top five list for the premium segment in all the regions it operates in apart from India and North America.
On what he expects from premium smartphones in the near future, Senior Analyst Varun Mishra says that “Going forward, the premium segment, driven by the replacement demand across markets, is likely to keep growing and outpace the global smartphone market growth. Another large opportunity driving the segment would be the installed base of Huawei users in China, which is approaching its replacement cycle”
Mishra also expects the launch of foldables at more affordable prices to play a huge part in driving growth in the premium market.