Around 25% of the smartphones shipped in 2024 globally had a wholesale average selling price (ASP) of $600 or more. New data from Counterpoint Research suggests that the premiumization trend in the smartphone market is on the rise, and more people are buying expensive phones than before.
The market share of premium smartphones has jumped from 15% in 2020 to 25% in 2024, as the premiumization trend contributed to a steady influx of buyers who want to purchase feature-packed devices.
Apple remained the segment leader in 2024, capturing over 67% of the premium devices market share. The Cupertino giant was followed by Samsung, Huawei, Xiaomi, and Google, who pulled Apple down from 72% a year ago.
Zooming into the premium price segment, the market share of "Ultra-Premium" smartphones (ASP >= $1,000) grew over 40% for the first time as more people wanted to buy the top-end variants.
Speaking of ultra-premium devices, Apple again held the crown as the average selling price for the iPhone exceeded $900 for the first time. The report notes that device makers have started to put revenue over volume, and the 8% year-over-year growth in the premium price segment even outperformed the overall 5% growth of the smartphone market.
While the US may not have the world's fastest internet, it may have the highest share of premium smartphones. The report says that the US was the largest contributor to the premium segment in 2024, with a 25% share, followed closely by China with 24%.
Meanwhile, India, one of the largest smartphone markets by volume, has witnessed a 5x rise in the premium segment since 2020 as customers preferred top brands. While some customers may be unable to afford pricey phones in one payment, easier financing and trade-in offers have made it easier for them.
"The premiumization trend is expected to carry on, although at a slightly slower pace, as emerging regions continue to move up the price bands. The premium segment is expected to grow further in China due to the incorporation of smartphones under the subsidy program," the report said.
There can be several reasons why premium smartphones are able to reach more customers despite the pocket-burning price tags. Those looking for an overall better user experience opt for high-end features like better processors, cameras, displays, and GenAI features.
The cherry on the cake is that device makers try to justify their price tags by offering multi-year software support and future-ready hardware to ensure longevity. Samsung and Google have started offering up to seven years of software support for the Pixel series and flagship Galaxy devices, even exceeding Apple's five years for the iPhone.
In Apple's case, it has been reported that the stickiness of its ecosystem plays an important role in pulling users away from cheaper phones. Apple CEO Tim Cook also said during the company's Q1 2025 earnings call that iPhone 16 models sold better in markets where Apple Intelligence was rolled out.
Source and image: Counterpoint Research
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