Despite a tough economic year in 2022, the premium smartphone market managed to grow, thanks to wealthy consumers who weren’t as affected by the macroeconomic difficulties, or so you would think. Even for less affluent customers, it may be that smartphones have become increasingly central to their lives, so people are willing to spend more on high-quality devices with advanced features and capabilities. This means users are holding onto their devices for longer periods, leading to greater demand for premium devices that offer greater longevity by virtue of being the latest and best. So, it’s no surprise that sales of premium smartphones rose, while sales of entry-level and mid-tier smartphones declined.
Most data on smartphone sales tend to categorize products by price point (included below is a fresh report on the market), but if you look at the trends in display sizes (above), it’s clear that consumers are increasingly more comfortable with bigger displays, which means more expensive phones. So, you have to ask the question, does size matter? Well, yes, it does. You’re paying the price of a decent laptop computer for a premium phone, and you can make allowances for the cameras, but at the end of the day, it’s that display real estate that’s going to seal the deal. It’s like buying an apartment in a teeming metropolis compared to buying a home in the suburbs. They may cost the same, and they may be different sizes, but that doesn’t change that general desire that you have to make that apartment seem as big as that house. If you’re reading this in your tiny house or converted old school bus, just go along with the analogy, trust me, it makes total sense.
I have a feeling that display size may also end up influencing foldable smartphone sales. A foldable, in theory, is going to give users twice the display area for a device profile that may end up being twice as thick but still fit in your cargo pants. There is no meaningful apartment analogy here because I am not a licensed realtor.
The other interesting question about the data is the clearly middling expectations for phones with smaller displays. Here, again, foldables may reenergize the market. Otherwise, is there really going to be anything but a budget market for any phone under 6 inches? And does anyone want to pull out that phone when everybody else is walking around showing off how they can unspool their phone display and use it as a picnic blanket?
Premium Smartphone Sales in 2022
As for the recent data on premium smartphone sales, according to Counterpoint, global premium smartphone sales grew by 1% YoY in 2022, even as overall global smartphone sales fell by 12% YoY due to macroeconomic difficulties. The premium segment, with a wholesale price of ≥$600, contributed to 55% of the total global smartphone market revenue for the first time, capturing over one-fifth of total global smartphone sales.
Apple captured three-fourths of total sales in the premium segment, with sales growing by 6% YoY. Samsung, whose sales declined by 5% YoY in 2022, lost out on the China market opportunity due to its weak presence in the region. Google was also featured among the top OEMs growing from a low base, driven by the Pixel 6 Pro and Pixel 7 Pro. Android has been ceding share to iOS in the premium segment, with iOS capturing three-fourths of all smartphone sales. However, Android could see a new wave of growth in 2023, as more OEMs launch foldable devices in the premium segment, and Honor expands its market share in China and makes a global push.
