According to a recent report by Counterpoint, the global market for premium smartphones has shrunk by 8% in Q1 this year, after Apple’s shipments dropped 20%. The report defines smartphones as “premium” if their price is higher than $400.
Part of the reason why Apple suffered is that buyers are holding onto their iPhones longer. The replacement cycle for iPhones has grown over to three years, on average, from two years. Another factor is low shipments in China.
North America remains the largest market for premium phones (30%), with China close behind at 26%. The Chinese market, however, was sluggish in the first quarter, which was the other major factor in the global decline. Estimates suggest that almost half of the decline in the global premium segment in Q1 2019 was due to the sluggish Chinese market.
Samsung ended up with one-fourth of the global premium segment, its highest ever share over the past year. This was also the first time Samsung launched three devices instead of its usual two in the S series, thus covering wider price points.
Huawei
Huawei managed to capture a double-digit share, becoming the third biggest player globally. Impeccable camera quality, AI technology, and superior build quality on its Mate and P series drove the growth for Huawei in the quarter. It even surpassed Apple in the premium Chinese market – a market where Apple has been struggling.
However, there’s trouble ahead for Huawei. The trade ban imposed on it by the US will restrict its continued global growth. Declining sales will cripple Huawei’s marketing capability and R&D investment budgets for the future. The company even forecasted a 40 to 60% decline in sales for the year.
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Analysts believe that the incoming 5G phones will help the premium section grow. In 2019 and 2020, all the 5G devices are expected to launch in the premium segment.
