Premium Smartphone Average Selling Price Reaches Record Q2 High
The global premium smartphone market ($400 and above wholesale price) average selling price (ASP) grew 8% YoY to reach $780, a second-quarter record, in Q2 2022, according to Counterpoint Research’s Market Pulse Service. This was mainly driven by the 94% YoY sales growth in the $1,000 and above price segment. The segment alone contributed to over one-fourth of premium smartphone sales and over a fifth of global smartphone revenues in Q2 2022. The growth of the segment also drove the global smartphone ASP to its highest second quarter ever.
Commenting on the growth of the $1,000 and
above price segment, Senior Analyst Varun Mishra said, “As 5G is becoming more
prevalent, consumers are upgrading their devices. This is especially
significant, as the large installed base of premium iPhone users upgrades to
5G. Apple’s sales grew 114% YoY, capturing over 78% of the $1,000 and above
price segment. Consumers whose finances were not affected by the pandemic have
been using the extra disposable income created due to restricted travel to buy
more expensive devices, including smartphones. During the pandemic, users also
realized the importance of smartphones and started seeing more value in
upgrading their devices. Another interesting factor is that this trend in the
ultra-premium market is ubiquitous across regions, despite inflationary
pressures. This is because affluent consumers are not affected by the current
economic headwinds. Hence, the low-to-mid-price segment has been hit hard by
the recent macro headwinds while the high-price segment still looks solid,
further boosting the ASPs. Also, the
increasing number of financing schemes and a growing ecosystem of trade-ins and
EMIs are also helping consumers to upgrade their devices without paying the
total price upfront.”
The segment’s growth has also helped in
arresting revenue declines. Despite the unit sales decline, global premium
smartphone market revenues remained flat YoY. As lower price tiers got affected
more by inflationary pressures, the premium market’s revenue contribution to
the overall smartphone market increased to 60% in Q2 2022 from 58% in Q1 2022.
In terms of volumes, sales in the premium
segment declined 8% YoY in Q2 2022 but performed better than the overall
smartphone market, which declined 12%. This is the ninth consecutive quarter in
which the premium market has outperformed overall smartphone market growth.
Apple continued to lead the premium segment
with a 57% share as the 4G iOS installed base continued to upgrade. Sales and
promotions in the US remained strong through the quarter. There was no evidence
of any macroeconomic impact on demand. Apple also continued to successfully onboard
new users as switcher growth hit a fresh record during the quarter, largely
driven by robust growth in emerging economies.
Samsung’s sales grew 2% YoY and its share
also increased as the S22 Ultra continued to be the best-selling Android
smartphone in the premium segment for the second consecutive quarter.
The share of Chinese OEMs OPPO, Xiaomi and
Huawei declined as their home market struggled through Q2 2022, clocking the
lowest quarterly sales since Q4 2012. However, vivo’s sales grew 59% YoY as it
surpassed OPPO to become the third largest premium smartphone brand in Q2 2022
for the first time ever. Most of this growth came from China, driven by the
X80, S15 and iQOO 9 series. vivo also became the second largest premium
smartphone brand in China for the first time ever. It was also the largest
smartphone OEM in China in the affordable premium segment ($400-$699), driven
by the X80 series.
The increase in the share of “Others”
brands was mainly driven by HONOR. The brand has been rapidly expanding in
China over the last few quarters. The HONOR 70 was its best-selling model in
the premium segment, followed by the Magic 4. The overseas markets’ contribution to HONOR’s sales is also likely to increase as the
brand enters new geographies.
Going forward, the premium segment is likely to
continue to outpace the global smartphone market. Commenting on the outlook,
Research Director Tarun Pathak said, “The second half of the year will also be
marked by key launches like the new Fold series from Samsung and the new iPhone
series from Apple, which are likely to drive growth in the premium segment.
Chinese OEMs will also start to bring their foldable devices to the global
markets, further expanding the premium market portfolio. Higher BoM and
operational costs backed by the raw material prices remaining high, growing
inflation, and volatility in foreign exchange rates have been putting further
pressure on OEMs to maintain profitability, which will be reflected in the
growing ASPs. All these factors will keep on driving the ASPs high in 2022. We
believe the premiumization trend has already started across several markets,
and it is here to say.”
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