Close to 40 OEMs Competing in the Premium Smartphone Segment: Counterpoint

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Premium segment contributed to one-fourth (22 per cent) of the global smartphone shipments in 2018. This segment grew 14 per cent in India

Apple continues to lead global premium smartphone segment by capturing more than half of the market while OnePlus entered the top five brands in the premium segment for the first time ever in 2018 as competition intensified in the global premium smartphone segment. The segment grew faster than the global smartphone market, according to Counterpoint Research’s Market Monitor 2018 service.

The segment grew 14 per cent year-on-year (YoY) in terms of sell-in and 18 per cent YoY in terms of sell-through. Growth was driven by new iPhones and launches in a premium segment from Chinese OEMs like Huawei, OPPO, OnePlus.

Scaled up presence from Chinese players

Overall, Chinese players have scaled up their presence in the premium segment and have expanded the category. Further, they are now eyeing new geographies for growth. Apple remained the market leader capturing 51 per cent share of the premium segment, a significant lead over its nearest competitor Samsung which had a 22 per cent share. However, Chinese brands made their mark as Huawei’s share in the segment reached double digits (10 per cent) for the first time in a calendar year. OPPO (+863 per cent), OnePlus (+209 per cent), and Xiaomi (+149 per cent) were the fastest growing brands in the premium segment.

An indication of the increasing competition in the segment is highlighted by the fact that close to 40 OEMs now compete in the premium segment globally. Of these, the top five players account for almost 90 per cent of shipments. Premium segment contributed to one-fourth (22 per cent) of the global smartphone shipments in 2018.
different brands performed in the premium segment: –

Performance of brands

Huawei’s strong performance was primarily due to the success of the P20 and Mate 20 series, which focussed on camera, power, and design as key differentiating features. It also gained share in the premium segment in China and Europe.

Oppo’s growth came from its home market China with R15 and R17 series doing well. The brand is actively targeting European countries with its mid-to-high-tier offerings. Additionally, it is also targeting operators in Europe to launch its 5G portfolio outside China, along with new features in its flagship like 10x Zoom.

OnePlus’s performance came on the back of the OnePlus 6T. In terms of regions China, India, and Western Europe drove four-fifths of its global shipments. OnePlus recorded its highest ever shipments in a single quarter (Q4 2018) in India to lead the premium smartphone segment for three successive quarters and captured 36% market share. Another feat for the brand came in Q4 2018 when it entered among Top five OEMs in the premium segment in the US for the first time. Google entered the top five premium smartphone brands in Western Europe in 2018.

Region-wise growth

In terms of regions, APAC was the fastest growing region for the premium segment with a growth of 27 per cent YoY. Huawei, Oppo, Vivo, and Xiaomi’s performance in China drove this growth. In terms of countries, China and the US alone contributed to more than half of the global premium market shipments. China’s premium segment grew 37 per cent YoY while the US grew 10 per cent YoY.

Other countries where the premium segment grew fast include Indonesia (+54 per cent), Russia (+28 per cent), Canada (22 per cent), Mexico (22 per cent), Thailand (+20 per cent), India (+14 per cent), Brazil (13 per cent), and Japan (10 per cent).

The future forecast

Going forward Counterpoint estimates that the premium smartphone segment will continue to grow in double digits. By offering additional features like AI, triple camera, full-screen display, and higher memory configurations, smartphone OEMs are subtly increasing the average selling price (ASP) of devices. This also helps them leverage the gap created by Apple in the premium segment.

The next growth cycle in the premium segment will be driven by the emergence of commercially available 5G smartphones. This will help OEMs to not only to target users looking to upgrade but also give Chinese OEMs an opportunity to enter new geographies where 5G will be commercially available soon.

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