Premium smartphone segment grows in Q3, due to new iPhones: Counterpoint

The firm also notes that in the premium segment, $400-$600 price-band was the sweet spot as it contributed to 46 per cent to the total premium segment by volume. Overall, the premium smartphone segment represented 22 per cent of the global smartphone market share, and this includes all phones priced $400 and higher.

While there are 40 OEMs competing in this premium smartphone. segment globally, the top five players account for almost 89 per cent of shipments. This also shows the level of saturation and control exercised by the top five brands in this segment, where brand reputation is crucial in driving sales.

“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,” Tarun Pathak, Associate Director with Counterpoint Technology Market Research said in a press release.

In the premium segment, Apple was the leader with 47 per cent share globally with Samsung at number two with 22 per cent share. Huawei was number three with 12 per cent share, and this was the first time that the Chinese player crossed the double digit mark in this segment.

vivo and Oppo were number four and five respectively with five per cent share each, and Xiaomi had 3 per cent market share.  According to Counterpoint, brands are targeting the premium segment to strengthen their bottom-line profits, though the mix between price bands remains somewhat unstable.

Huawei was number three with 12 per cent share, and this was the first time that the Chinese player crossed the double digit mark in this segment with P20 series driving sale.

In the $400 to $600 segment, Samsung was ahead with 25 per cent share, followed closely by Apple (21 per cent), Huawei (17 per cent), vivo (10 per cent) and OPPO (7 per cent). However, OnePlus was the fastest growing brands in the $400-$600 price bracket.

Sales of OnePlus are primarily being driven by markets like India, China and UK, according to Counterpoint. The one-flagship a year strategy has worked for OnePlus, which is now the market leader in India’s premium smartphone segment with 30 per cent share, thanks to the success of OnePlus 6.  Data also showed that OnePlus managed to break into the top five premium smartphone OEMs in France, Germany, Italy, Netherlands, Sweden and UK.

Counterpoint’s numbers also indicate that in the $600 to $800 price mark, Apple and Samsung dominate with 81 per cent of shipments. This is not surprising given very few players are entering this high price segment.

Apple has pushed the base price of its iPhones to $799 with the new iPhone XR being the cheapest. The older iPhone 8 and iPhone 7 start at $599 and $469 respectively. The trend is that older models of the iPhone do well in sales, after newer models launch, due to the price drop.  Huawei shipments in this segment of $600 to $800 were driven by P20 series.

In the $800+ segment, Apple clearly dominated with 80% share during the quarter. Apple’s newer iPhone XS starts at $99, while the iPhone XR is starting at $799. Apple has firmly looked at pushing the price mark above $1000 with its newer iPhones, and managed to get some success out of this.

With Oppo, vivo and Xiaomi, their growth in premium segment was driven by performances in China, while OnePlus and Huawei, generated growth outside China.

In Apple and Samsung’s case, sales continue to be driven by developed markets like the USA, China, Japan, Korea and countries in Western Europe. Google also managed to enter among top five premium smartphone brands in West Europe during the quarter, though it has a long way to go in terms of global rankings.

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